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Quick Commerce as a Competitive Asset for Urban Retail Stores - Blog Visual

Quick Commerce as a Competitive Asset for Urban Retail Stores

Why Retail Needs Cloud-Based Supply Chain Platforms

Quick Commerce as a Competitive Asset for Urban Retail Stores
Supply Chain Management

Retailers find it challenging to innovate, not just since the recent pandemic. Yet a rethink is long overdue: online retailing has multiplied the competition for customers and on all available sales channels. To make matters worse, former successful concepts for customer loyalty have long since become commonplace. Bonus cards, discounts, and champagne with a fitting have lost their appeal. Whether in city centers or rural shopping malls, even hip stores and discounters of all kinds are only a little magnet for customers. Innovative concepts for stationary retail have been in demand for years because those who leave the couch expect a personalized shopping experience. And that's precisely what Instagram & Co. inspire every day.

The pandemic has exposed the status quo. In the lockdown times, those who were still not online were left behind: They couldn't serve the last mile to the customer. In 2021, it almost seemed as if brick-and-mortar retail would die out for good. Whether it was a large city or a small town, a mall or a shopping center: deserted storefronts dominated the picture. In the meantime, the city centers are recovering and surprising people with many new ideas.

Urban Stores with Microdepot: The New Hubs for the Last Mile in the Supply Chain

Online retail was the clear winner during the lockdowns, but creative omnichannel companies are way ahead in the longer term. The Inditex Group has been a pioneer of innovative shopping concepts for years, not just with its flagship ZARA: The global store concept was expanded to include online stores and innovative apps well over ten years ago. Today, all channels are closely networked. The stores themselves have long been responsible for the last mile to the customer as a micro-depot on several routes: online purchases can be delivered to the customer's home or the desired store by parcel or express delivery, and the same applies to returns.

In the online store, it is also possible to check availability in the nearest stores and make reservations directly. If you can't find your size in stock at the store, you can order now from the label in the online store. The investments of the past few years have paid off: competitors had long since been left behind, and the Group brought its figures almost back to the level of 2019 as early as 2021 (see Financial Data Inditex Group).

Omni-Channel Logistics Is a Success Multiplier for Diverse Industries

This recipe for success is not just reserved for the big fashion chains: Pure online retailers are temporarily entering city centers with pop-up stores. Even social media startups are engaging their customers through personal contacts, such as Sally's World, which even added its own flagship store to its online store during the pandemic. Anyone investing in space today is thinking in several dimensions at once: The point of sale with customer loyalty is just as important as the logistics functions as a micro-depot for online orders. The last mile to the customer is significantly shortened for at least the fast movers so that the desired purchase can be taken away directly or delivered within the next few hours, if not minutes - including delivery tracking, of course.

System catering is now also backed up by sophisticated supply chain management with quick commerce concepts - especially when they seek out a wide variety of customers, like the Bavarian franchise company dean&david. The fresh food pioneers have long since outgrown pure system catering: In addition to a mobile kitchen for company canteens, vending machines in supermarkets are also stocked with bowls, sandwiches, and the like. Even Lufthansa recently started offering a small range of healthy, sustainable snacks. Despite all their successes, the founders have never lost sight of customer orientation: Customers can use the app to pre-order their menu for on-the-spot consumption or ToGo; thus, dean&david saves its customers unnecessary waiting time and, at the same time, attracts walk-in customers thanks to a clear queue at the counter. Recently, there has even been a delivery service for selected urban branches via the app - delivery is, of course made sustainably by cargo e-bike.

The Prerequisite for Successful Omni-Channel: The Perfect Combination of Systems

Quick Commerce - The Prerequisite for Successful Omni-Channel: The Perfect Combination of Systems

From the customer's point of view, what is simple and self-evident seems no small matter for companies themselves. The supply chain plays the decisive role: as in a large orchestra, the instruments themselves, as well as the ensemble, must be played and conducted ideally. In day-to-day business, internal systems such as ERP/merchandise management and warehouse systems, online stores and apps, branch systems and business partners, logistics companies, and customer loyalty systems must be perfectly coordinated and orchestrated. It is precisely this complexity that deters so many from finally putting their plans into action. Compared to an orchestra, companies also have several internal and external conductors who, like the instruments themselves, must be able to pick up the beat at any time. Therefore, the supply chain must be transparent and manageable for everyone involved at any time and anywhere.

The Solution for Modern Omni-Channel Businesses: Smart Logistics Platforms

Anyone who has already taken the first step knows that it doesn't have to be complicated, and it doesn't have to be all at once. The simple solution lies in the intelligent networking of existing and new systems on a supply chain platform. The advantages of a superordinate networking platform are apparent: On the one hand, the various company divisions do not have to do without their appropriate systems, such as merchandise management or CRM, and thus protect previous investments. On the other hand, digital gaps can be closed, or stand-alone solutions and business partners can be integrated.

The result is a one hundred percent digital supply chain from order entry at the supplier to the final delivery point at the customer. As a result, companies with a digital supply chain platform master several challenges: The change in global trade with interrupted supply chains and resource bottlenecks, staff shortages, and innovative delivery concepts to the customer.

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Mastering the Digital Transformation Step by Step

With platbricks®, even previously analog companies can digitalize their supply chain. The platform's modular system consists of over 250 functions and features that can be individually tailored to the needs of the respective company. The application examples range from order entry or webshop connection, flexible and decentralized warehousing in micro depots, and connection of courier service providers for intraday deliveries (quick commerce) to autonomous delivery in the future.  B2B companies such as the wholesaler for trailer spare parts, Helmut Bünte GmbH, can also profit sustainably.

Why Does the Cloud Offer the Best Conditions for Supply Chain Platforms?

Together with us, the German Logistics Association (BVL) conducted a study on better collaboration in logistics in 2021. The goals of the companies surveyed from industry, trade, and logistics were unanimous: improving service quality and reducing costs through improved digital collaboration between business partners. Interestingly, more than 55 percent of logistics companies already use cloud-based IT systems. The retail sector, with a share of only 37 percent, is switching over rather cautiously. The main reasons cited for this reluctance were internal organization and, above all, concerns about data protection - although this is precisely one of the main arguments in favor of the cloud:

  • The cloud is the perfect hub for different business partners: Whereas with direct networking via EDI, for example, each company had to be connected directly, communication in the cloud to various business partners can be standardized. In other words, networking with transport or telecommunications service providers, for example, is practically possible via plug & play.
  • The cloud is flexible, always available, and secure: In the cloud, your processes run non-stop, 24 hours a day, 365 days a year. What's more, IT cloud infrastructures offer maximum security and also grow with your requirements. Many companies no longer want or can afford this level of flexibility and security in their own data center. By the way, most startups go for the cloud right away - a calculable amount x per month is easier to finance through future sales than getting a loan approved at the bank. And if things go wrong, the contract is adjusted at the end of the month.

Conclusion: Cloud-Based Supply Chain Platforms Strengthen Competitiveness in Several Respects

Not only customer demands but also changing world markets, crises and climate change will only be survived by those companies that consistently focus on digitalization. Cloud supply chain platforms such as platbricks® offer the perfect framework for digitizing companies step by step.

A Glimpse of the near Future: From the Vending Machine to the Unmanned Store

One of the themes for the future is the self-service store without staff - the Unmanned Store. It is just the logical further development of shopping options that we have known for ages: The vending machine. It once replaced kiosks and booths and became a victim of rapid take-away growth. During the pandemic, the vending machine unexpectedly experienced a second spring: whether it's the farmer's yard sale, the local butcher, or restaurants and hotels, there's now a vending machine on every corner where you can "pull" fruit and vegetables, barbecue meat or even a selection of prepared delicacies around the clock.

Clever grocers have already developed the first pilots for genuine self-service stores, thus creating an answer to local supply in urban and rural infrastructures. Rewe Group had already signed a contract with Sana Kliniken through Lekkerland in 2021 and introduced self-checkout mini stores in two hospitals. Since March 2022, Rewe has opened the first Nahkauf box in Plettberg, Bavaria. Due to Sunday and public holiday regulations, the state government initially restricted the 24/7 shopping concept. Still, the people of Plettberg protested successfully, so: Plettbergers can now do their shopping 24/7 in the Nahkauf Box.

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Written by

Bernd Jaschinski-Schürmann
Expert for Supply Chain Management