Holiday 2020: An interview with RILA’s Jessica Dankert
The retail sector was among the hardest hit by the Covid-19 pandemic. Now, retailers are scrambling to salvage the holiday shopping season amid strange and uncertain times.
David Maloney has been a journalist for more than 35 years and is currently the group editorial director for DC Velocity and Supply Chain Quarterly magazines. In this role, he is responsible for the editorial content of both brands of Agile Business Media. Dave joined DC Velocity in April of 2004. Prior to that, he was a senior editor for Modern Materials Handling magazine. Dave also has extensive experience as a broadcast journalist. Before writing for supply chain publications, he was a journalist, television producer and director in Pittsburgh. Dave combines a background of reporting on logistics with his video production experience to bring new opportunities to DC Velocity readers, including web videos highlighting top distribution and logistics facilities, webcasts and other cross-media projects. He continues to live and work in the Pittsburgh area.
This year, we’ll likely see a holiday shopping season like no other before it. And hopefully, we’ll never see one like it again. As we all know by now, the Covid-19 pandemic has upended the retail landscape. A number of major retailers have closed their doors forever, unable to withstand the one-two punch of mandated store closures and the e-tail tsunami. But others, particularly those that had already mastered the e-tail game, have thrived. Meanwhile, many have done an admirable job of changing up their business models in the blink of an eye.
Jessica Dankert has had a front-row seat to the action. She is vice president of supply chain for the Retail Industry Leaders Association (RILA), a trade association of U.S. merchants. It probably goes without saying that these days, Dankert and her colleagues are focused on helping RILA’s member companies navigate the uncharted waters of 2020 and beyond.
Dankert recently spoke to DC Velocity Editorial Director David Maloney about the current state of retail, what retailers expect for this unusual holiday season, and how the in-store experience is likely to change.
Q: Between the mandated store closures and subsequent operating restrictions, the Covid-19 pandemic has seriously disrupted retail operations. How would you describe the current state of the industry?
A: It has been a very interesting past handful of months, but I think retail generally is really quite strong. Most companies have reopened, and we’ve seen sharp spikes in e-commerce sales as homebound consumers shifted to online buying. I think it has been impressive to see how retailers have been able to pivot so quickly and respond to the needs of the consumer in this new era of doing business.
Q: We’ve seen several major retailers file for bankruptcy or shut down altogether. Were those companies that were already struggling or were their problems brought on by the pandemic?
A: I think having mandated closures has not been helpful—and not just for retailers, but also for the restaurant, hospitality, and entertainment sectors. It has been challenging. You see a lot of retailers examining and adjusting their models in order to respond to the new realities and, in many cases, coming back stronger.
Q: Are there common denominators among those companies that will succeed in this environment versus those that are at risk?
A: I think the supply chain is key to the retail organization. Certainly, the companies that designed their supply chains from the outset to be flexible and responsive have done well and survived the first part of the pandemic. But it has been a learning experience.
We’ve seen a lot of examples of supply chains that have really risen to the occasion in order to keep goods moving. We’ve witnessed their ability to pivot and meet entirely new needs, such as offering curbside pickup or ship-from-store service for retailers who weren’t already doing that. The speed at which retailers and their supply chains were able to adapt their operations to the new realities has been very exciting to see.
Q: How critical is information to these efforts? Will this push more retailers to digitize their supply chains?
A: The experience of retailers in the past couple of months has underlined the importance of visibility, which has been underpinned by digitization and a lot of the technologies that help provide that visibility. We need to accelerate that process and really get to a point where it’s enabling the kind of flexible supply chains you need in times of disruption.
Q: Are retailers moving to automated systems, especially if they’re filling fewer store-replenishment orders and more small orders for individual customers?
A: I think automation has definitely been on the table, and we continually talk about it with members. I don’t know that [the surge in e-commerce] has necessarily accelerated the shift. It just changes the conversation a bit and adds more data to that discussion. So much of what retailers do is data-driven—they’re constantly looking at the data to see what trends are taking shape that they’ll need to respond to and plan for. At the end of the day, it’s all about flexibility—the flexibility to respond to a pandemic or another type of disruption or consumer trend. So to the extent that automation can enhance flexibility and an operation’s ability to respond to whatever challenge crops up next, it could be another valuable tool in the retail toolbox.
Q: Are larger retailers faring better than smaller retailers?
A: I don’t think it’s necessarily a question of size. It really depends on the retailer itself and how well it was prepared for disruption—specifically with respect to its ability to make quick changes and quick decisions all in the name of meeting customer needs. It is really more around the organizational culture and whether or not company leaders have set up an organization, and by extension, a supply chain, that’s able to react and respond in times of upheaval.
Q: How key is that supply chain to their success?
A: It is certainly a big driver, but not the only driver. Supply chain is what’s behind the scenes making it happen and is obviously critical to serving the customer. What we’re seeing across many organizations are supply chains that over the past decade or so have grown increasingly important and have adopted a more strategic and customer-facing role. While [retail success] is really much more about the total experience a customer has, a good supply chain is certainly a key ingredient of successful retail, especially in the age of e-commerce.
Q: During the shutdowns, many people tried online grocery shopping for the first time and started ordering items they formerly bought in stores from e-commerce sites. Has this become the new norm, and are brick-and-mortar stores going to have to change their role?
A: That is a huge question that everybody is looking at: How “sticky” are these e-commerce sales trends? How long does this pattern play out? Is this a long-term shift? How much of that business will revert to stores as economies open up?
In many ways, the surge in e-commerce is just an acceleration of a trend that retailers had long been aware of and were planning for. They were already looking at the brick-and-mortar in-person experience and how that and the e-commerce experience can complement each other. What can you do differently with the brick-and-mortar setting to make it more relevant and enrich the customer’s experience? The e-commerce explosion is going to move things along a little bit, but I think retailers have been giving a lot of thought to that topic for some time now.
Q: How are retailers envisioning this holiday season? Do they think it will be a typical shopping season with respect to the time frame?
A: I don’t think anything about 2020 will be typical, including the holiday shopping season. In a traditional year, peak season starts around Thanksgiving, which helps guide all the forecasting, sales, and planning activity that goes into retailers’ preparations. All of those things will be different this year. As for timing, it will depend a lot on the economy and what is done at the federal and state government levels, the impacts there.
While it will definitely be an atypical holiday season, I do think that people are still going to be shopping. People are always going to need to buy things and shop for holiday gifts.
Q: Container shipments and overall import volumes are down. Does that mean retailers are “leaning” their inventories, and will we see shortages in some product categories as a result?
A: Retailers are continually evaluating what they’re doing with their inventory and what makes sense going forward, given the constant shifts in consumers’ purchasing patterns. The answer will be different for different retailers and for different products. I don’t think we’ll necessarily see across-the-board reductions in inventory, but I do think retailers are giving a good deal of thought to where they’re positioning their stock and what that means from a customer standpoint.
Q: Do you see more shipments coming directly from stores this year?
A: Definitely. We are seeing more retailers either launching ship-from-store programs or expanding their existing ship-from-store footprint. Ship-from-store makes a lot of sense in terms of being closer to the customer and being able to be more responsive. It’s essentially another tool in the retailer’s toolbox.
Q: While customers have been somewhat more understanding during the pandemic, they haven’t necessarily lowered their expectations for speedy delivery. Is that going to present a challenge during peak season, and are retailers looking at other delivery modes, such as crowdsourcing, to meet those expectations?
A: Parcel shipping at peak has frequently been a challenge during holiday seasons, so it is something they plan for. And they’re always looking at different delivery methods, whether it’s crowdsourcing, working with third parties, or other nontraditional ways to handle that last mile. You see a lot of new players in the space trying to help retailers solve their delivery challenges and a lot of retailers trying new tactics. I think the result will be a lot of options for the customer, as opposed to a one-size-fits-all solution.
Q: Bottom line, how are retailers looking at the upcoming peak holiday season? It’s going to be very different from anything we’ve ever experienced.
A: Yes, it is going to be a nontraditional, atypical rest of 2020. But based on what I’ve heard from members I’ve spoken with, retailers are very optimistic. Retailers have been buoyed by the experiences they’ve had with customers over the last several months and the success of their efforts to meet customers’ changing needs. The customers have responded to that. I think it has really just underscored the importance of retail in this country.
Q: Is there anything you wish to add?
A: Yes. Everyone, please wear your masks when you shop. It is important to keep retail workers safe. It is important to keep our communities safe. Please wear your masks.
Progress in generative AI (GenAI) is poised to impact business procurement processes through advancements in three areas—agentic reasoning, multimodality, and AI agents—according to Gartner Inc.
Those functions will redefine how procurement operates and significantly impact the agendas of chief procurement officers (CPOs). And 72% of procurement leaders are already prioritizing the integration of GenAI into their strategies, thus highlighting the recognition of its potential to drive significant improvements in efficiency and effectiveness, Gartner found in a survey conducted in July, 2024, with 258 global respondents.
Gartner defined the new functions as follows:
Agentic reasoning in GenAI allows for advanced decision-making processes that mimic human-like cognition. This capability will enable procurement functions to leverage GenAI to analyze complex scenarios and make informed decisions with greater accuracy and speed.
Multimodality refers to the ability of GenAI to process and integrate multiple forms of data, such as text, images, and audio. This will make GenAI more intuitively consumable to users and enhance procurement's ability to gather and analyze diverse information sources, leading to more comprehensive insights and better-informed strategies.
AI agents are autonomous systems that can perform tasks and make decisions on behalf of human operators. In procurement, these agents will automate procurement tasks and activities, freeing up human resources to focus on strategic initiatives, complex problem-solving and edge cases.
As CPOs look to maximize the value of GenAI in procurement, the study recommended three starting points: double down on data governance, develop and incorporate privacy standards into contracts, and increase procurement thresholds.
“These advancements will usher procurement into an era where the distance between ideas, insights, and actions will shorten rapidly,” Ryan Polk, senior director analyst in Gartner’s Supply Chain practice, said in a release. "Procurement leaders who build their foundation now through a focus on data quality, privacy and risk management have the potential to reap new levels of productivity and strategic value from the technology."
Businesses are cautiously optimistic as peak holiday shipping season draws near, with many anticipating year-over-year sales increases as they continue to battle challenging supply chain conditions.
That’s according to the DHL 2024 Peak Season Shipping Survey, released today by express shipping service provider DHL Express U.S. The company surveyed small and medium-sized enterprises (SMEs) to gauge their holiday business outlook compared to last year and found that a mix of optimism and “strategic caution” prevail ahead of this year’s peak.
Nearly half (48%) of the SMEs surveyed said they expect higher holiday sales compared to 2023, while 44% said they expect sales to remain on par with last year, and just 8% said they foresee a decline. Respondents said the main challenges to hitting those goals are supply chain problems (35%), inflation and fluctuating consumer demand (34%), staffing (16%), and inventory challenges (14%).
But respondents said they have strategies in place to tackle those issues. Many said they began preparing for holiday season earlier this year—with 45% saying they started planning in Q2 or earlier, up from 39% last year. Other strategies include expanding into international markets (35%) and leveraging holiday discounts (32%).
Sixty percent of respondents said they will prioritize personalized customer service as a way to enhance customer interactions and loyalty this year. Still others said they will invest in enhanced web and mobile experiences (23%) and eco-friendly practices (13%) to draw customers this holiday season.
That challenge is one of the reasons that fewer shoppers overall are satisfied with their shopping experiences lately, Lincolnshire, Illinois-based Zebra said in its “17th Annual Global Shopper Study.”th Annual Global Shopper Study.” While 85% of shoppers last year were satisfied with both the in-store and online experiences, only 81% in 2024 are satisfied with the in-store experience and just 79% with online shopping.
In response, most retailers (78%) say they are investing in technology tools that can help both frontline workers and those watching operations from behind the scenes to minimize theft and loss, Zebra said.
Just 38% of retailers currently use AI-based prescriptive analytics for loss prevention, but a much larger 50% say they plan to use it in the next 1-3 years. That was followed by self-checkout cameras and sensors (45%), computer vision (46%), and RFID tags and readers (42%) that are planned for use within the next three years, specifically for loss prevention.
Those strategies could help improve the brick and mortar shopping experience, since 78% of shoppers say it’s annoying when products are locked up or secured within cases. Adding to that frustration is that it’s hard to find an associate while shopping in stores these days, according to 70% of consumers. In response, some just walk out; one in five shoppers has left a store without getting what they needed because a retail associate wasn’t available to help, an increase over the past two years.
The survey also identified additional frustrations faced by retailers and associates:
challenges with offering easy options for click-and-collect or returns, despite high shopper demand for them
the struggle to confirm current inventory and pricing
lingering labor shortages and increasing loss incidents, even as shoppers return to stores
“Many retailers are laying the groundwork to build a modern store experience,” Matt Guiste, Global Retail Technology Strategist, Zebra Technologies, said in a release. “They are investing in mobile and intelligent automation technologies to help inform operational decisions and enable associates to do the things that keep shoppers happy.”
The survey was administered online by Azure Knowledge Corporation and included 4,200 adult shoppers (age 18+), decision-makers, and associates, who replied to questions about the topics of shopper experience, device and technology usage, and delivery and fulfillment in store and online.
An eight-year veteran of the Georgia company, Hakala will begin his new role on January 1, when the current CEO, Tero Peltomäki, will retire after a long and noteworthy career, continuing as a member of the board of directors, Cimcorp said.
According to Hakala, automation is an inevitable course in Cimcorp’s core sectors, and the company’s end-to-end capabilities will be crucial for clients’ success. In the past, both the tire and grocery retail industries have automated individual machines and parts of their operations. In recent years, automation has spread throughout the facilities, as companies want to be able to see their entire operation with one look, utilize analytics, optimize processes, and lead with data.
“Cimcorp has always grown by starting small in the new business segments. We’ve created one solution first, and as we’ve gained more knowledge of our clients’ challenges, we have been able to expand,” Hakala said in a release. “In every phase, we aim to bring our experience to the table and even challenge the client’s initial perspective. We are interested in what our client does and how it could be done better and more efficiently.”
Although many shoppers will
return to physical stores this holiday season, online shopping remains a driving force behind peak-season shipping challenges, especially when it comes to the last mile. Consumers still want fast, free shipping if they can get it—without any delays or disruptions to their holiday deliveries.
One disruptor that gets a lot of headlines this time of year is package theft—committed by so-called “porch pirates.” These are thieves who snatch parcels from front stairs, side porches, and driveways in neighborhoods across the country. The problem adds up to billions of dollars in stolen merchandise each year—not to mention headaches for shippers, parcel delivery companies, and, of course, consumers.
Given the scope of the problem, it’s no wonder online shoppers are worried about it—especially during holiday season. In its annual report on package theft trends, released in October, the
security-focused research and product review firm Security.org found that:
17% of Americans had a package stolen in the past three months, with the typical stolen parcel worth about $50. Some 44% said they’d had a package taken at some point in their life.
Package thieves poached more than $8 billion in merchandise over the past year.
18% of adults said they’d had a package stolen that contained a gift for someone else.
Ahead of the holiday season, 88% of adults said they were worried about theft of online purchases, with more than a quarter saying they were “extremely” or “very” concerned.
But it doesn’t have to be that way. There are some low-tech steps consumers can take to help guard against porch piracy along with some high-tech logistics-focused innovations in the pipeline that can protect deliveries in the last mile. First, some common-sense advice on avoiding package theft from the Security.org research:
Install a doorbell camera, which is a relatively low-cost deterrent.
Bring packages inside promptly or arrange to have them delivered to a secure location if no one will be at home.
Consider using click-and-collect options when possible.
If the retailer allows you to specify delivery-time windows, consider doing so to avoid having packages sit outside for extended periods.
These steps may sound basic, but they are by no means a given: Fewer than half of Americans consider the timing of deliveries, less than a third have a doorbell camera, and nearly one-fifth take no precautions to prevent package theft, according to the research.
Tech vendors are stepping up to help. One example is
Arrive AI, which develops smart mailboxes for last-mile delivery and pickup. The company says its Mailbox-as-a-Service (MaaS) platform will revolutionize the last mile by building a network of parcel-storage boxes that can be accessed by people, drones, or robots. In a nutshell: Packages are placed into a weatherproof box via drone, robot, driverless carrier, or traditional delivery method—and no one other than the rightful owner can access it.
Although the platform is still in development, the company already offers solutions for business clients looking to secure high-value deliveries and sensitive shipments. The health-care industry is one example: Arrive AI offers secure drone delivery of medical supplies, prescriptions, lab samples, and the like to hospitals and other health-care facilities. The platform provides real-time tracking, chain-of-custody controls, and theft-prevention features. Arrive is conducting short-term deployments between logistics companies and health-care partners now, according to a company spokesperson.
The MaaS solution has a pretty high cool factor. And the common-sense best practices just seem like solid advice. Maybe combining both is the key to a more secure last mile—during peak shipping season and throughout the year as well.