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Retail Industry Spotlight

Posted by ArcBest on January 12, 2022 - 12:00 PM
Learn what’s happening in the retail industry in this Q&A with ArcBest retail expert Dwight Hayes.

Discussing the latest industry challenges with retail expert Dwight Hayes

In 2021, the retail industry saw historic disruptions driven by significant changes in consumer buying habits. Increased spending on goods over services, heightened demand for e-commerce fulfillment and a need for seamless, contactless shopping experiences created a challenging retail landscape. And experts are predicting that these market stressors could be a new normal — at least for the foreseeable future.

We sat down for a Q&A with Dwight Hayes, ArcBest executive director of enterprise sales ­­­retail, to discuss what retailers and vendors could see in the coming year and what they can do to continue meeting consumer needs.

Q. What are the biggest challenges for retailers and vendors in 2022?

A. The biggest challenges will be a lot of the same stressors we saw last year. High demand, ongoing labor shortages and the freight backlog at U.S. ports means supply chains will stay stressed. Even with the manufacturing slowdown for the Chinese New Year, the most optimistic forecasts don’t predict the supply chain to normalize until at least June. Other experts don’t expect a slowdown until the end of the year.

Even with those constraints, consumers still have high expectations for the service they receive. They want easy, seamless experiences whether they’re shopping digitally, online or both — like with buy online, pick up in store (BOPIS). The growth in e-commerce also creates a need for reverse logistics strategies to efficiently handle returns. All of this means that retailers and vendors have to meet demand and manage returns despite capacity and workforce limitations. With high service standards, vendors meeting compliance guidelines like on-time, in-full (OTIF) will be more important than ever.

Q. How can businesses overcome those challenges?

A. The key to overcoming those obstacles is being open to using new and creative strategies to respond to sudden changes in demand. Retailers should focus on developing solutions to meet customer needs through a variety of channels. And vendors will need to adapt to new fulfillment models to satisfy retailer compliance standards.

Shipping and procuring early is one good strategy because it helps your logistics provider find the capacity you need. On top of that, it’s also a good idea to ship with experienced providers with the solutions and technology to help meet complex delivery requirements.

Q. How can shippers using final mile services keep up with demand?

A. With the growth in omnichannel, the prediction is that store fulfillment will increase by 200% in the next four years. Vendors shipping directly for retailers with a final mile request need to be prepared to ship direct-to-consumer instead of with traditional DC fulfillment. This will allow for faster delivery but could require some changes to operations to ensure success. Your logistics partner can help you evaluate your processes and come up with optimal solutions.

Q. What else should businesses know about operating in this environment?

A. Despite the current challenges, retailers that are consistent and flexible in meeting customer needs have a real opportunity to build positive brand associations and create repeat customers — the same goes for vendors. Staying nimble and responsive to needs and challenges can establish your business as a trusted name now and in the future.

Q. How can ArcBest help with meeting consumer demand?

A. One of the most important things shippers can do right now is partner with providers that are experienced, strategic and versatile. Talk to us about how we can use our broad suite of logistics solutions to help you overcome your challenges. This can include supply chain optimization, managed transportation services, expedite shipping through our Panther Premium Logistics fleet, truckload, LTL shipping, and our retail compliance solution, Retail+. Utilizing the right options can make a big difference in on-time performance and customer satisfaction.

Keep up with customer demand with ArcBest retail solutions

With sustained high demand and limited capacity, it’s more important than ever for retail shippers to develop a strong relationship with their logistics provider. Keep your customers satisfied with ArcBest retail logistics solutions, including multimodal transportation, final mile solutions, product launch services and compliance planning. Our team is ready to conduct a complimentary analysis and help you find the best options for your business. Learn more about our retail solutions today.