Do you know that in the year 2022, the number of supply chain disruptions reached almost 11,600 globally? A more staggering data tells us that supply chain disruptions result in 7.5% decrease in sales and 4.5% rise in the expenses. So what solutions retailers are opting to manage supply chains? 

Read also: Enhance Accuracy in Logistics Demand Forecasting With AI

Globally, retail logistics is the key to effectively managing the flow of goods from suppliers to consumers. Not only supply chain management, retail logistics also helpful in speedy delivery, inventory management, cost effectiveness, risk mitigation, enhanced customer experience, etc. On the back of this, various companies are opting for retail logistics options. This blog explores the key trends, giving us a glimpse of the booming industrial landscape in retail logistics market. 

Currents trends shaping the Retail Logistics 

The rapid growth of e-commerce has revolutionized retail logistics. Online shopping has increased the demand for efficient and flexible logistics solutions that can handle a high volume of small orders. It has been estimated that there are almost 2.6 billion online buyers in the world as of 2024. In the age of digitalization and convenience, e-commerce has emerged as a game-changer in the retail industry. With a simple click, consumers can now shop for products from the comfort of their homes, leading to a significant shift in buying patterns. While this has undoubtedly transformed the way we shop, it has also unleashed a tidal wave of changes in the logistics sector. As per the World Economic Forum, cross-border trade has expanded by almost 25% in the last ten years. Additionally, Over the past ten years, internet buying has become more popular worldwide. Retail e-commerce revenues are expected to increase by an additional 56% by 2026, having nearly quadrupled between 2014 and 2021. 

The retail logistics industry is undergoing a revolution with the rise of sustainable practices and green logistics. Companies in various sectors are actively working to reduce their carbon footprint and embrace environmental friendly practices in their logistics operations. This trend is being fueled by increasing consumer demand for environmentally conscious products and a growing awareness of the environmental impact of logistics. According to a survey conducted by analysts at Research Nester, 82% of customers worldwide strongly believe that businesses should contribute to environmental improvement.

As consumers increasingly prefer brands with sustainable practices, retailers adopting green logistics can attract a larger customer base and foster loyalty. By aligning with regulatory requirements and global sustainability goals, the retail logistics industry can achieve long-term growth and resilience while contributing to environmental preservation. 

The growth of the retail logistics industry is being driven by increasing consumer demand for omnichannel retail. This demand necessitates seamless integration of different shopping channels, prompting retailers to enhance their logistics operations to ensure efficient inventory management, faster delivery times, and a consistent customer experience across online and offline platforms. Investment in advanced technologies and logistics solutions enables retailers to meet these expectations, leading to increased sales, customer satisfaction, and competitive advantage, ultimately fueling industry growth. 

Likewise, omnichannel platforms see a 250% increase in consumer buy frequency compared to single channels, which results in a 14% rise in average order size. The finding that consumers who use many channels for their purchases have a 32% higher life value to businesses than those who use just one appears intriguing.

In the current times, artificial intelligence (AI) is transforming the logistics and retail industries by facilitating better supply chain management and individualized client experiences. Retailers are using artificial intelligence (AI) to evaluate customer data and offer customized recommendations, which boosts sales and customer satisfaction.

For instance, retailers in the UK are progressively embracing Artificial Intelligence (AI) technologies to support their data and analytics operations. 82%of UK merchants used AI technology in e-commerce, while 76% of them used chatbots for customer care. Only half of the UK merchants polled for this study used AI from a supply chain viewpoint. As of 2019, less than half of retailers had used warehouse robotics and logistics, although 57% of retailers benefited from AI in the area of stock management in warehousing.

These trends are creating a profitable landscape for the retail logistics market to expand. As per projections, the retail logistics market size was valued at USD 240.5 billion in 2023 and is poised to reach USD 10132.4 billion by the end of 2036, registering around a 12.9% compound annual growth rate (CAGR) during the forecast period of 2024-2036. 

Case Studies: Success Stories in  Retail Logistics 

Let us discuss how Walmart improvised its company growth through retail logistics :

Walmart has improved its supply chain with technology investments like blockchain for transparency, IoT for real-time tracking, and automated systems in distribution centers. These enhancements have boosted efficiency, improved last-mile logistics, and increased customer satisfaction and loyalty.

A staggering 72% of Walmart’s strategic capital expenditures between 2019 and 2020—a total of over USD 11 billion—went toward supply chain modernization. Walmart’s impressive revenue of approximately USD 612 billion in 2023 is proof that this significant investment has proven to be crucial.

Additionally, we see how Amazon employed retail logistics to improve & expand its services: 

Amazon has revolutionized retail logistics with its advanced technologies and extensive fulfillment network, including robotics, AI, and a vast distribution center. The prime service offers quick delivery and the company also invests in autonomous delivery vehicles and drones for innovative last-mile solutions.

Amazon’s growth continued in 2019, with the company delivering an estimated 2.5 billion packages, averaging 20 packages per household. Nowadays, Amazon has more than one million square feet of fulfillment centers. Globally, Amazon is expanding quickly as it gains more authority over its logistics. Currently, Amazon oversees 115 million square feet of distribution centers across the globe, with 104 of those centers located in the United States and 69 overseas.

Taking the above points into consideration, the retail logistics industry continues to employ innovations to meet the demands of the future. However, here we only scratch the surface of trends promoting the retail logistics market growth, and a more detailed analysis covering segmentation, regional differences, and market analytics is needed for further information on the retail logistics market.

Source : https://www.researchnester.com/reports/retail-logistics-market/6257