Home' FMCG Business : FMCG DEC 2015 Contents D
istributors, suppliers and convenience store owners must
prepare for the challenges ahead, as the industry and the
world in which it operates face large-scale changes.
This was one of the key messages in a webinar,
presented by the US-based Convenience Distribution
Association (CDA)*, and entitled “10 Challenges
Distributors Will Face in 2025.”
Keynote speaker Dr Tony Vercillo, a 25-year veteran in the supply
chain industry, said: “Most people spend their time working in
the business and not necessarily on the business.” He stressed that
understanding the future helps people formulate a strategy to deal
with it, and understanding multiple levels of trends puts people in a
better position to execute their plans.
Vercillo shared his findings based on research and communication
with government officials. He identified a number of distinct challenges
that C-stores and their distributors will face in the near future.
The workforce of the future will be considerably more ethnically diverse
and older, as people work much longer before retiring. These changing
demographic facts will change the way we do business on every level.
Continued pressure on the minimum wage is likely to push it to higher
hourly rates, according to Vercillo. This will increase the number
of part-time workers as businesses cope with labour that is more
expensive due to the minimum wage.
The use of robotics and smart machines will rise for distributors as more
advanced technology becomes available. This provides ways of saving
money through automation and reducing human error. Additionally, 60%
of all buying is expected to occur on cell phones, even at the store level.
Accordingly, mobile applications will be a crucial part of achieving success.
Distributors’ vehicles and material handling equipment will fall
under increased scrutiny in order to reduce emissions, and
regulations will require carbon-footprint-reduction reporting. This,
plus increased oversight regarding driver hours of service, will
increase compliance costs.
Social technologies will become a central part of everyday life, reshaping
companies from the inside and pushing them to create and deliver
value to customers. Even companies with no social media presence will
eventually need to integrate social technologies into customer service,
order processing and logistics as mobility and connectedness become
the heart of the future business technology environment.
As technology and mobility advance, security becomes all the more
important in the face of cybercrime and a rising tide of litigation,
new policies and regulation. Consumers prioritise digital privacy, and
distributors must be “buttoned up” with security of their customers as
well as their internal security.
The US Food and Drug Administration is likely to clamp down on a variety
of categories, affecting electronic cigarettes and vapour products, diet
drinks, energy drinks and dietary supplements. Increased regulation and
labelling requirements will result. New Zealand needs to watch these trends.
Globalisation will affect business at every level, and distributors won’t
be insulated by operating domestically or regionally. Foreign supply
will become a more compelling option, and standard cell phones will
have mobile reach as the norm.
To get ahead of all these challenges, Vercillo simply recommended
planning. This can consist of setting up a Futures Committee to attack
rising costs; developing green/sustainability plans; analysing the use
and legality of using part-time workers; developing a technology plan
with improved security measures; and much more.
*The Convenience Distribution Association (CDA), formerly AWMA, is the trade organization working
on behalf of convenience products distributors in the United States. Its distributor members represent
more than $92 billion in US convenience product sales, serving a wide variety of small retail formats.
Associate members include leading convenience product manufacturers, brokers, retailers, suppliers
and others allied to the industry.
What does the future hold for the
convenience store industry?
[ C-store ]
42 FMCG BUSINESS - DEC/JAN 2016
Links Archive FMCG NOV 2015 FMCG FEB 2016 Navigation Previous Page Next Page