Retail & Distribution

Retail and the distribution network that supplies it cannot be underestimated in its impact on the global economy. Consumers and the money they spend on result goods represent between 6% and 10% of the global economy.

Empowering Retail and Distribution Innovation

Retail and Distribution is one of the most visible parts of the global economy. For consumers, this part of the economy is the world they live in every day.

More than any other industry, retail was massively impacted by the COVID-19 pandemic. Europe, the Middle East, and Africa went into lockdown about March of 2020. In some cases, stores didn’t reopen for a year and a half. Only now, in 2024, are most analysts stating the most of the industry is back on a normal footing.

Retail Revolution with Keonos's Solutions

Definition


In general retail goods include those tangible items that consumers buy, excluding food and fuel. Here is a short list by way of example:

●Apparel
●Books
●CDs and DVDs
●Electronics
●Furniture
●Jewellery
●Make-up
●Perfumes
●Pre-packaged foods

The industry is highly visible and somewhat volatile; for many consumers, these are goods that are not as necessary as food, fuel, and housing. They will tend to stop buying them if the economy is weak.

Global


Growth in the consumer products infused has been driven larger by price increases, not by increased demand or increasing market size. These price increases haven’t hurt the industry, “A Deloitte analysis of the 100 largest public CP companies by revenue, coupled with a survey of 250 global CP executives, finds that top performers were able to raise prices as much as or more than others, with smaller hits to volume and more margin growth.”

This pattern for growth may be played out as consumers are resisting further price increases. According to Oberlo, “In 2024, the retail industry growth is set to hit 4.9%. This increase will bring total retail sales worldwide to $31.1 trillion.”

Oberlo goes on to say, “Growth is expected to continue in the coming years, albeit at a slower rate. In 2025, the retail industry growth rate is forecast at 4.2%—0.7 percentage points lower than this year. According to analysts’ projections, the global retail industry’s growth rate is forecast to decline even more in 2026 and 2027, to 3.8% and 3.6%, respectively. 2027’s growth rate is also the slowest in the forecast period from 2021 to 2027.” Ibid.

EMEA Region


According to CBRE, major European retail markets are expected to grow in line with pre-pandemic trends in 2024, with no accelerated growth. Savills predicts a 3.7% increase in retail sales in real terms in 2024, supported by rising real disposable incomes. BNP Paribas Real Estate also predicts a rebound in retail sales in 2024 in almost all European countries. The COVID-19 pandemic had a lasting effect on how consumers spend, namely there is continued pressure on retailers to provide same-day delivery, easy online shopping, and more.

Retail growth in Europe, the Middle East, and Africa is being driven by greatly slowing inflation. Where some parts of Europe saw double digit inflation in the past two years, that has come down significantly. This allows wages to begin to catch up and for consumers to look more favourably on purchasing items that they might see as unnecessary.

With oil prices somewhat subdued, the Middle East is expected to only see modest growth in retail in the next few years.

Challenges to the Retail and Distribution Industry 

1. Inflation

Challenge: Inflation has been a significant factor in the last two years. Globally, inflation was 8.71% in 2022, 6.88% in 2023, and is projected to be 5.79% in 2024. According to Statista, inflation will continue to drop globally to about 3.83% in 2028

Solution: For both retail and distribution, the key will be to implement cost reduction measures. Taking advantage of artificial intelligence and other technological innovations can reduce costs significantly.

2. Supply chain resilience

Challenge: During the COVID-19 pandemic, the whole world discovered that our supply chain was filled with problems. As consumer demand shifted, the supply chain couldn’t keep up. According to Deloitte, less than half of retailers believe they effectively deal with supply chain disruptions.

Solution: A visible supply chain is the answer. Integrating your manufacturer’s shipping, your distributor's supplies, your shipping company’s tracking system, and your inventory information will allow you to see where everything is. Proper inventory control allows retailers and distributors to respond to supply chain disruptions quickly and smoothly. By having a fully integrated supply chain, every link in the chain will know precisely where everything is at and how to respond.

3.Customer Experience

Challenge: With a lack of larger markets to enter, many businesses in the retail and distribution industry can grab market share by providing customers with a better experience.

Solution: The key to success is to increase the company’s digital presence. Making same-day delivery possible, shipping directly from the warehouse, and making returns faster and easier is the key to garnering customers’ trust and loyalty. Using a CRM designed for tracking the customer journey is the key; every interaction should reflect what has gone before, what the customer enjoys, and recognizes the patterns of the consumers’ activities.

4. Environmental Sustainability

Challenge: Environmental sustainability is about more than simply meeting customers’ wishes; in many cases, governments are reinforcing it and companies have made a commitment to becoming more sustainable.

Solution: Sustainability starts with a commitment to ESG matters in the boardroom and passing that commitment down to every level of the company. It’s also important to pass this commitment horizontally to one’s partners in the supply chain. Each company can make commitments to change how they operate. Sustainability also offers the added advantage of usually reducing long-term costs.

5. Seamless Buying Process

Challenge: Consumers are seeking a completely seamless buying process. From the first moment they consider an item to the final delivery and follow-up consumers are looking for everything from a single place in a single voice. At the moment, even “simple” functions like being able to tell customers where their item is can be outside the norm for many companies and their supply chain partners.

Solution: Integration is everything. At this point, nearly every company has put some type of tracking in place. The problem is that most of the supply chain is siloed, with all the information the consumer needs separate from the systems they have access to. To deliver a seamless business process, it’s necessary to create a seamless supply chain tracking system, then make that available to the consumer. 4

6.Siloed Marketing

Challenge: One of the most important functions of a retail firm is marketing. Without marketing, getting the message out about what your business sells and does is impossible. In many retail settings, the marketing efforts are siloed from the rest of the business. The supply chain, the retail outlets, the payment services, and even corporate leadership has no idea what marketing is doing and how it’s impacting the rest of the business.

Solution: Once again, complete integration of apps and systems is what’s needed. Using a proper integration app and a data visualisation program, one can see how everything is affecting everything else. Marketing efforts and how they result in sales can be easily integrated into other factors, like supply chain disruptions, and economic changes.

Retail & Distribution Industry
2024 and beyond

A vital part of the global economy, retail and its supporting distribution network are a bellwether of how well business is doing and how well it adapts to changes. As the global market completely recovers from the COVID-19 pandemic, retail will once again be on pre-pandemic footing. Investments are continuing and business is getting back to normal. Pressures, like inflation and global instability, are contributing to struggles. The key to making sure that the retail and distribution industry remains strong is to increase efficiency and provide the customer with experience they seek. Technology, as with every other industry, is the tool for making this happen. From integration programs and updated systems to supply chain visibility and dynamic pricing, retail has many opportunities to keep profits high with very little effort.

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