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Knowledge Center Blog Snackables: The Bite-Size Big-Impact News Digest - July 2020

Ecommerce Sales to Jump 18% This Year in the USA, eMarketer Forecasts

Another potential upside from the COVID-19 pandemic is the accelerated eComm growth in North America. While eComm isn't really new news... it is remarkable how small eComm sales were in relation to overall retail sales in North America before now. While the number seems to vary, one can safely say "3%" was the range - prior to 1H'20. This forecast suggests it's going to jump significantly, but there is no surprise at the industry segments that lead the way (hint: food & beverage...). PPC LAND


Grocers Embrace Food Delivery, but They Still Don’t Love It

Grocers have been trying to find an eComm model that works for them and their customers. But groceries, especially "perimeter items" like produce, deli and meats - tend to be subject to consumer inspection. COVID-19 challenged that and more and eComm sales ramped up 5 fold in late Q1'20 and continued into Q2'20 as pandemic fears impacted all retail sectors. The acceleration has forced more retailers to look closely at this business in search of a profitable solution. Ideas abound, but few have come up with a sustainable model... yet. "Dark stores", large spaces close to major residential areas in once active shopping malls may be a casualty for one industry and an opportunity for another. Time will tell, but a large space, with no consumers to interfere with the selection and stocking process, but very close to local consumers, may be the next hot solution to a vexing retail challenge. WSJ


New Warehouse Leases and Renewals Increase With a Push From E-Comm

The elasticity of demand isn't overly surprising, is it? While nearly every industry took a pause in March, April and most of May... the demand for warehousing space is up. And if you live in a large urban area where there are lots of potential eCommerce consumers - then you witnessed the defiance of economic gravity. Leases for DC space were up over 40% in the 30-day period between mid-April and mid-May... while most of us were locked down in our homes! Some of these stats are truly remarkable. RETAIL BREW


Post-Pandemic Supply Chains Seek ‘Resilience,’ Report Says

The report this year suggests that many manufacturers, retailers, and suppliers are considering maintaining higher inventories as we head into the "restart" phase following the "Great Pause". On the positive note, logistics spending in total was down in 2019 vs. 2018. However, the general consensus is that the 2018 results were skewed higher due to the transportation shortage witnessed that year. All signs suggest more warehouse space will be needed as part of "restart" strategy... this could add 5% - 10% in additional operating costs. Of course, with costs rising, and with few options, the need to look for greater levels of operational efficiency are forecasted - and technology is one of the primary tools logistics professionals are likely to turn to in the coming periods. WSJ


The Post-Pandemic DC

As DCs open around the country, there are many discussions on "best practices". Unfortunately, there is no playbook at this time, and many of the best practices are based on common sense with a high degree of re-engineering needed as leaders observe the reality of their plans on a day-by-day basis. Clearly screening, procedural checklists around cleaning, and operational rules are on most lists right now. Some attention to workflow is logical... let's keep the associates from congregating in the aisles. Finally, while hard to implement, contact tracing within the facility - i.e. a log identifying who worked in which area each day - probably makes sense as well. In all cases, the Great Resume (following the Great Pause) is not going to be business as usual. MODERN MATERIALS HANDLING


Learnings from Leading Supply Chain Organization

Gartner highlights 3 trends that are common among peak performing firms who rely on Supply Chain execution to differentiate themselves as they navigate through this COVID-19 restart. 1. They are each purpose-driven organizations. 2. All of them have embraced business transformation, and the status quo is simply not acceptable. 3. Digital is the only way to achieve results at scale. SUPPLY CHAIN MANAGEMENT REVIEW


Trucking, Warehouse Companies Boost Hiring in June

June hiring stats are out. Fulfillment operations added a majority of the new jobs in our space last month. There could be a host of explanations. But the most logical reason is the elasticity of demand for eCommerce shipments. It looks like our neighbors and friends have "discovered" eCommerce and they like it. And with COVID-related warnings escalating as we turn the corner into the warmest months of the year, this practice is quickly becoming a permanent habit. WSJ


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