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Retail Business Review | Friday, March 11, 2022
Retailers had peddled investments in supply chain agility for the past decade, but once their inventory reserves dried up, supply chains proved to be anything but nimble and agile.
FREMONT, CA: Cross-retail industry groups will likely look to work and pressure Congress to address the labor market's strategic issues. Retailers should seek to address border crossing regulations (which have placed significant strain on global logistics employees who were stuck in countries during COVID-related border closures), incentivize immigrants to relocate to markets where labor availability is low, and support paid childcare and create meaningful jobs that return labor to the workplace.
The retailers' actions to mitigate the challenges faced in 2021 will impact beyond the retail sector. Manufacturing Industries of robotics and automation will thrive as they race to increase capacity. Realizing the trend years ago, Tesla entered the competition with their new Tesla Semi truck.
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Broad-scale adoption of automation will enable businesses to scale more effectively to meet large demand spikes, eliminating the need for large amounts of labor for peak demand. In addition, this will impact the temporary labor market as the retail industry hires less surge labor. Lastly, green initiatives may increase costs or reduce efficiency as companies look to divert capital for supply chain investments and maximize efficiency.
- Will retailers commit to de-risk their supply chain, even if it means taking higher costs in the short-to-medium term and diverting funds from other projects?
- Was the covid-19 pandemic a big enough event for retailers to obtain the dedication for sustainable change, or will they go back to previous practices after black swan events?
- What does this mean for businesses that do not have the capital to invest in these initiatives?
- Response of the public to retailers' efforts to automate processes (e.g., pressure on Walmart to stop the use of replenishment robots in their stores during the pandemic)
As is often the case, complacency will end some retailers.
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