Every year, nearly $2 trillion is lost worldwide due to poor inventory management in the retail industry. 

Even if the situation was previously considered “acceptable”, everything may be turned upside down next January. Having been voted in by the French National Assembly in December 2019, new anti-waste legislation, which includes a ban on destroying unsold non-food items, should come into force in 2022.

Next year, manufacturers will no longer be able to destroy their unsold goods and must reuse, recycle or donate them instead.

This measure is being adopted as ecology becomes more and more important in the e-commerce market. This can be seen not just in the legislation but also in consumer expectations. Some 61% of professionals have observed an increased concern among their consumers, and this concern has led to greater vigilance and demands from customers.

In a booming e-commerce sector, companies have to juggle with ever more demanding and sometimes contradictory customer expectations, such as an ever faster yet ever more ecological online purchasing process.

The impact of e-commerce development on the supply chain

Having the right stock in the right place has become a strategic issue more than ever before, especially since e-commerce is more subject to fluctuations in demand than physical stores.

Since March 2020, all companies have started to use e-commerce and many new questions have arisen. Should we split the store and e-commerce stocks or keep a common stock? If we keep a common stock, which should be prioritized when there is low stock? Which replenishment method should we adopt? How should we manage returns and reintegrate them into the store and warehouse?

Anticipating the end consumer’s demand and behavior more accurately seems more essential than ever for the retail industry as it reacts to volatile and continuously changing demand and consumption patterns.

Retail manufacturers must (re)learn how to better manage their inventories to meet current economic challenges and consumer expectations.

What does the supply chain of tomorrow look like?

Fluctuating consumption habits lead to a certain instability in demand, and traditional tools are no longer sufficient to help us to understand such variability. Instead, we must make use of technological advances to prepare for and control this volatility.

Digital innovation is a real vehicle for process optimization and therefore business growth. It is important to raise awareness in order to generate new processes and implement tools that allow a more efficient and resilient supply chain, capable of meeting consumer demands.