Supply Chain Council of European Union |

Top Challenges Impacting the Retail Supply Chain

In SpendEdge’s latest report, Top 5 Challenges in the Retail Supply Chain, the company found that the retail supply chain is under pressure to constantly innovate and serve the changing needs of consumers.

Shift in retail formats are forcing retailers to monitor the supply chain and ensure high-quality products. Meanwhile, the shift in the working model and e-commerce players have complicated the retail supply chain. Country-specific politics, trade and tariff law, international relationships and quality control have further added to the woes of retailers.

Retailers must optimize their supply chain, but before that they need to gain detailed insights into the challenges that some are currently facing. 

Challenges in the Retail Supply Chain

Tight profit margins

Companies in the retail category aim to delivery a razor-thin profit margin. Majority of the consumers are highly price-sensitive, thereby making it difficult for retailers to increase profit margins. Moreover, the increase in online channels provides customers a tool to compare prices across various retailers, adding to low profit margins. 

High customer expectations

Customers are increasing expecting the best quality goods at the lowest prices. In the Amazon day-and-age, they are used to seeking more options while making any purchase. This makes it difficult for the retail supply chain to keep up with the varying customer demand and improve customer satisfaction. Providing a large variety of goods to serve customers has become a major challenge for businesses. 

Operational inefficiency

The retail supply chain usually lacks visibility across key business departments. The silos of information existing across each business unit make it difficult for companies to achieve operational efficiency. They must opt for the latest ERP systems to keep pace with the operations function rather than relying on traditional spreadsheets.

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