Retail Supply Chain Research Articles

Dynamics of supply chain distribution systems in the apparel industry

Expansion into new markets creates new opportunities and dynamics which could enhance a company’s growth prospects. It thus calls for scalable supply chain distribution systems in competitive marketplaces. The retail supply chain requires sustainable distribution systems to enhance cost efficiency. This study examined the influence of centralised, decentralised, or hybrid distribution systems on agile service delivery, productive human capacity and the supply chain process and technology. First, the study aimed to establish whether a centralised or decentralised supply chain distribution system supports expansion to the African marketplace. Secondly, this study assessed the challenges of inventory positioning and availability on the existing outbound and inbound product flow systems across the African continent. Thirdly, the study examined the interrelated strategic distribution centre performance level to develop the supply chain distribution value proposition model. A descriptive research design was employed using univariate and multivariate methods and data were gathered from 100 staff in an apparel company. The study found that a sound distribution centre requires efficient supply chain systems and a strong workforce. This calls for training and development of employees to improve the organisation’s productivity and efficiency. The managerial implications include the need to ensure that distribution centres support sustainable product availability.

The effect of digital communication technologies in retail supply chain management: Evidence from Indian small retailers

Indian retail industry held the second rank in A.T. Kearney's Global retail development index in 2021 and ranked 16th FDI confidence index. The retail industry provides ample job opportunities and contributes to the economic progress of the nation. After the advent of new innovation there are new technologies which have emerged in business and it also substantially changed consumer behavior. Digital communication allows the user to transfer data from one end to another using digital technologies like e-mail, phone calls, video conferencing, and several instant message applications. Digital communication allows retailers to send personalized business information to their loyal customers and the customers respond to those messages, which in turn generate business for unorganized retailers. Digital communication not only improves the business of unorganized retailers but also the business image, Geographical spread, profitability, new customer acquisition, customer retention, and the like. Digital communication will transform the traditional unorganized retailer into an offline-to-online commerce model. Based on theoretical review this study identified constructs and proposed major determinants which influence technology adoption and its continuance among the unorganized retailers. This study assesses the digital communication technology usage in supply chain management among unorganized retailers with the constructs like experience, effortlessness, efficiency, enrichment, trust, security, digital infrastructure, satisfaction, and continuous intention to use. The results show that digital communication technology's effort, experience, and efficiency influence satisfaction. However, enrichment failed to influence satisfaction. Further, the results show that satisfaction and security influence continuous intention to use. However, trust and digital infrastructure failed to influence. Therefore, digital communication technology usage in supply chain management among unorganized retailers is substantially influenced by constructs like effort, experience, efficiency, satisfaction, and security.

Springs of digital disruption: mediation of blockchain technology adoption in retail supply chain management

Springs of digital disruption: mediation of blockchain technology adoption in retail supply chain management

A case and framework for expanding the use of model‐free evidence

A case and framework for expanding the use of model‐free evidence

The integration of retail supply chain and Industry 4.0

The integration of retail supply chain and Industry 4.0

Horticultural supply chain network design of small and medium-sized enterprises

This study investigates supply chain networks of small and medium-sized companies in the ornamental plants, perennials and cut flowers business in non-auction-driven markets such as Germany, and formulates a mathematical model depicting prevalent network design options. The results are based on an embedded multiple case study featuring in-depth expert interviews with people in charge of corresponding companies. The typical logistics network structures and associated product flows are identified and systematized that represent the supply chains of producers, wholesalers and retailers, as well as their vertical integration. These supply chain networks are analyzed in terms of characteristics and context-specifics and finally transferred to a mathematical model formulation. We find that direct deliveries from producers to retailers are preferred despite production-related lead times of several months or more because of shorter transportation times and therefore better product quality. Wholesalers are mostly used to compensate for product surpluses or deficits, and can offer short lead times. Our results show that the whole sector is dependent on reliable information about the market situation that is needed for accurate planning among the uncertainties the sector faces regarding aspects such as quality fluctuations, pests, trends in demand, and weather impacts on plant growth and final customer demand. This study is the first to provide a systematization and model of logistics systems in the horticulture business. It thereby aims at building the basis for a decision-oriented future stream of research, investigating and optimizing logistics in horticulture in a sustainable manner.

Buy-One-Get-One Promotions in a Two-Echelon Supply Chain

Buy-one-get-one (BOGO) promotions have become popular. With BOGO, the first unit is sold for the regular price, and the second unit is discounted. We analyze BOGO in manufacturer–retailer supply chains. We identify conditions under which BOGO outperforms price reduction (PR) and everyday low price (EDLP) policies. We find that, for some products, whether consumers stockpile or not, if BOGO and PR have the same market size, BOGO has a larger retailer profit and the same or larger manufacturer profit because BOGO induces more consumers to buy and consume two units. When consumers stockpile, the retailer sets prices to prevent such behavior, and the retailer’s share of supply chain profits is largest under BOGO, whereas consumer surplus with BOGO is smaller than PR. We also find that BOGO reduces double marginalization. When PR expands market size more than BOGO, BOGO’s effectiveness diminishes. When consumers stockpile without increasing consumption and/or production cost is high, EDLP is best. Our results are robust to multiperiod with single-promotion-period settings. A large number of regular-price periods following a promotion period increases stockpiling, which erodes the retailer’s profit and favors EDLP. If promotions are offered for consecutive periods, a larger number of promotion periods increases PR’s efficacy relative to BOGO. Time-inconsistent consumers increase stockpiling and make PR outperform BOGO. Heterogeneous consumers’ holding cost and marginal utility prevent retailers from perfectly discriminating among consumers who make profit-reducing choices. Compared with retailers’ BOGO, manufacturers’ BOGO increases double marginalization and decreases retailers’ and manufacturers’ profits and consumer surplus. This paper was accepted by Jayashankar Swaminathan, operations management. Funding: This work was partially supported by the National Science Foundation of China [Grants 71972026, 72101102]. Y. Li’s work was supported by the China Scholarship Council [Grant 201806070094]. Supplemental Material: The online companion and data are available at https://doi.org/10.1287/mnsc.2022.4638 .

Product availability and stockpiling in times of pandemic: causes of supply chain disruptions and preventive measures in retailing.

The coronavirus pandemic in 2020 brought global supply chain disruptions for retailers responding to the increased demand of consumers for popular merchandise. There is a need to adapt the existing supply chain models to describe the disruptions and offer the potential measures that businesses and governments can take to minimize adverse effects from a retail logistics perspective. This research analyses the possible reasons for supply and demand disruptions using a mathematical model of a retail supply chain with uncertain lead times and stochastic demand of strategic consumers. The established concepts of supply chain management are applied for the model analysis: multi-period inventory policies, bullwhip effect, and strategic consumers. The impact of the pandemic outbreaks in the model is two-fold: increased lead-time uncertainty affects supply, while consumer stockpiling affects demand. Consumers' rational hoarding and irrational panic buying significantly increase retailers' costs due to higher safety stock and demand variability. The bullwhip effect further exacerbates the disruption. The research contributes to the recent literature on business response to supply chain disruptions by developing a model where both retailers and consumers decide on the order quantity and reorder point during a pandemic outbreak. Buying limits, continuous inventory review, government rationing, substitutability, and omnichannel fulfillment are the measures that can limit the damage of supply chain disruptions from stockpiling during the pandemic. Effective communication and price and availability guarantees can mitigate the negative impact of panic buying.

Mitigating Food Waste in the Retail Supply Chain: Marketing Solutions

Food loss and waste is a global problem with an enormous magnitude. It has substantial economic, social, and environmental consequences. In this article, we focus on the problem of food waste, which is defined as loss of edible foods at the retail and consumption stages. Although not the main source of food waste in relative terms, retailers have a major role to play in food waste mitigation, by incentivizing upstream suppliers to reduce waste of resources and minimizing negative environmental impacts and by encouraging consumers to shift toward sustainable purchase and consumption behaviors. Given the close connection of marketing to retail operations and consumer behaviors, marketing scholars have the opportunity to make significant contributions in addressing the global food waste challenge. Our discussion focuses on how to mitigate food waste in retail outlets and by consumers through leveraging digital technologies and marketing knowledge. We first outline the economic, social, and environmental impacts of food waste, and then synthesize current mitigating practices by retailers. We discuss several technologies that are particularly important for mitigating food waste. Finally, we propose five areas that offer opportunities for future research and actions on food waste mitigation.

Federated Learning for Supply Chain Demand Forecasting

With the country’s policy support and the rapid development of Internet technology, the domestic consumption level has been escalating and the consumption structure has changed. The traditional retail industry cannot integrate all the relevant data due to data security and privacy protection concerns so that it is unable to adjust sales strategies in an accurate and timely manner. New retail has sounded the clarion call for the retail revolution. The supply chain demand forecasting is an important problem for the supply chain management. In this research, we propose a new retail supply chain commodity demand forecasting framework based on vertical federal learning, which solves the problems of data security and privacy faced by new retail theoretically and empirically. In experiments, we use datasets from different platforms (such as social platforms, e-commerce platforms, and retailers) in the same region for federated learning. The experiment results demonstrate the superiority of the proposed algorithm.

Alliance strategy in an online retailing supply chain: Motivation, choice, and equilibrium

In this paper, we investigate the alliance strategy in an Online Retailing Supply Chain (ORSC). Three alliance models in addition to one no alliance model is built and examined. The no alliance model as a benchmark is developed to characterize the alliance motivation for each supply chain member. Afterwards, we identify the optimal alliance strategy and the final alliance equilibrium. The results show that the manufacturer always has motivations to form an alliance with each of other two members, while the retailer and the platform may form an alliance only when the agency rate is relatively low. Moreover, under certain conditions, all supply chain members could achieve a win-win-win result in the manufacturer-retailer and manufacturer-platform alliance models, but fall into a lose-lose-lose situation in the retailer-platform alliance model. Additionally, it is interesting that a higher agency rate makes the retailer more profitable when the platform and manufacturer enter into an alliance. Finally, we find that each of the three alliance models may be the final equilibrium, which is largely dependent on channel competition and the agency rate.

Omnichannel Retail Strategy Considering Cost-Sharing and Consumer Heterogeneity under Different Power Structures

This paper explores two Omnichannel retail models consisted of one online platform and one brick-and-mortar store under different power structures considering cost-sharing mechanisms. In retail supply chain dominated by the online platform and brick-and-mortar store, respectively, under a “Buy online and pick up in store” strategy, the influences of the cost-sharing ratio and the proportion of traditional consumers on pricing and service decisions, the demands of various groups of consumers, and the performance of the retail system have been examined. In addition, the results of decision-making and profitabilities of retailers under different power structures have also been considered. The key findings show that the optimal price and service level first increase and then decrease with the cost-sharing ratio in a retail system dominated by the online platform. In contrast, the price and service level increase with the cost-sharing ratio only when the proportion of traditional consumers is relatively large in a retail system dominated by brick-and-mortar store. The symmetry demand increases as the scale of traditional consumers shrinks when the cost-sharing ratio is relatively large in a retail system dominated by the online system. At the same time, it only increases when the cost-sharing ratio is in the range of 5/8,5/6 in a retail system dominated by the brick-and-mortar store. No matter what the power structure is, the profit of the retail system always first increases and then decreases with the proportion of traditional consumers. Additionally, when the cost-sharing ratio and the proportion of traditional consumers are relatively small, the total demand in the retail system dominated by the online platform is higher than that in the retail system dominated by the brick-and-mortar store. The total profit is larger in the online platform-dominated retail system than that in the brick-and-mortar store-dominated retail system when the cost-sharing ratio is relatively high. However, when the cost-sharing ratio is relatively low, the profitability of the brick-and-mortar store-dominated retail system is stronger.

Product pricing and green decision-making considering consumers' multiple preferences under chain-to-chain competition

PurposeIt is necessary to implement green supply chains. But green development needs to be gradual and coexist with ordinary products in the market. This paper aims to study the green and ordinary product pricing and green decision-making under chain-to-chain competition.Design/methodology/approachThis paper considers consumers' multiple preferences and takes two competitive supply chains with asymmetric channels as the research object. Through the construction of the game models involving different competitive situations, this paper studies the pricing, green decision-making and the supply chains' profits, and discusses the impact of consumer green preference, channel preference, green investment and competition on the decision-making and performance. Finally, this paper further studies the impact of the decision structure on the environmental and economic benefits of supply chains.FindingsThe results show that consumer green preference has an incentive effect on the green supply chain and also provides an opportunity for the regular supply chain to increase revenue. Specifically, consumers' preference for green online channels improves the product greenness, but its impact on the green retailer and regular supply chain depends on the green investment cost. Moreover, competition not only fosters product sustainability, but also improves supply chain performance. This paper also points out that the decentralization of the regular supply chain is conducive to the environmental attributes of the green product, while the environment-friendly structure of the green supply chain is different under different conditions. In addition, the profit of a supply chain under centralized decision is not always higher than that under decentralized decision.Originality/valueThe novelty of this paper is that it investigates the pricing of two heterogeneous alternative products and green decision-making for the green product under the competition between two supply chains with asymmetric channels, in which the green supply chain adopts dual channels and the regular supply chain adopts a single retail channel.

Additive manufacturing integration in E-commerce supply chain network to improve resilience and competitiveness

In light of recently increased e-commerce, also a result of the COVID-19 pandemic, this study examines how additive manufacturing (AM) can contribute to e-commerce supply chain network resilience, profitability and competitiveness. With the recent competitive supply chain challenges, companies aim to decrease cost performance metrics and increase responsiveness. In this work, we aim to establish utilisation policies for AM in a supply chain network so that companies can simultaneously improve their total network cost and response time performance metrics. We propose three different utilisation policies, i.e. reactive, proactive – both with 3D printing support – and a policy excluding AM usage in the system. A simulation optimisation process for 136 experiments under various input design factors for an (s, S) inventory control policy is carried out. We also completed a statistical analysis to identify significant factors (i.e. AM, holding cost, lead time, response time, demand amount, etc.) affecting the performance of the studied retailer supply chain. Results show that utilising AM in such a network can prove beneficial, and where the reactive policy contributes significantly to the network performance metrics. Practically, this work has important managerial implications in defining the most appropriate policies to achieve optimisation of supply network operations and resilience with the aid of AM, especially in times of turbulence and uncertainty.

Research on green supply chain management of Retail Businesses from the prospective of carbon peaking and carbon neutrality goals: Taking JingDong as an example

The formulation of carbon peaking and carbon neutrality goals in long run provides the basic follow for enterprises to achieve the high-quality development of the supply chain, which will be bound to be applied to the greening of the supply chain of retailers. Hooked on these goals, retailers have adjusted their supply chain in terms of energy use structures. In the process of achieving these goals, this present paper takes JingDong as an example, aims at studying the green supply chain management selection of the current retailers, and tries further to fully analyze the three types of pressures faced by retailers using the Natural Resource-Based View (NRBV) as well as Institutional Theory(INT), which is of practical significance for the retail managers and policy makers to identify and implement appropriate green supply chain management strategies and improve the performance.

Blockchain Deployment in the Retail Supply Chain

The research aims to explore blockchain adoption for retail supply chain applications using two theoretical perspectives: supply chain capabilities and business value-added. Blockchain deployment in the retail supply chain helps in resolving some of the supply chain problems such as time delays, risks mitigation, information sharing, and product counterfeiting. In this study, various frameworks are conceptualized to understand, synthesize, and determine the value creation process. The research emphasizes that the benefits of blockchain deployment in the retail supply chain are broad-based and include enhanced trust and transparency, cost reduction, automation, increased processing speed, streamlined process, and disintermediation. The research also provides various illustrations to explain how retailers have successfully deployed blockchain technology in retail supply chains and improved their overall performance. Research also discusses the barriers to blockchain deployment in the retail supply chain and provides practical insights for smooth implementation.

Will Modest Fashion Industry Survive? Covid-19 Puts Fashion Modest Business to the Test

The COVID-19 pandemic has brought changes to the retail world; this creates a challenge to businesses focusing on modest fashion. Many modest fashion business owners change their selling approach to online method. This creates challenges to the retail supply chain and online shopping activities because of the surge in online orders. This article examines how modest fashion business owners carry out their business activities during the pandemic situation. By adopting strategic orientations and economic sustainability theories in the content, 20 modest fashion business owners were interviewed using online or offline, and the interview questions are structured. The purposive sampling technique was used to collect data from the interview. The data was analysed by using thematic analysis. The results indicated that modest fashion business owners found that many of their customers converted to loyal customers since their business went online. This online thing gave a boost to their sales revenue denying the stigma of uncertainty about modest fashion business. Meanwhile, for the offline modest fashion business owners, they claim that they need to digitalize their business to stay relevant in the current business era. There was difficulty in getting information and support from the participants whom are both online and offline modest fashion business owners. It became the main weakness of this study. Nonetheless, this study was important for the modest fashion industry as it has discussed issues during the pandemic circumstance and business survival. The outcome of this study will assist the managers of the respective businesses whom may be in search of proactive strategies or value creation initiatives to benefit the future of their modest fashion business.

Supply chain coordination contract design: The case of farmer with capital constraints and behavioral preferences

Coordination mechanism design is an important issue in agricultural supply chain. This study investigates agricultural supply chain coordination contracts in the presence of output uncertainty. It considers a two-level supply chain comprising a farmer and a retailer, where the farmer faces capital constraints and shows stockout-averse (SA), waste-averse (WA), or stock-out- and waste-averse (SW) preferences. The results show that the retailer order, production input, and supply chain expected utility in the decentralized decision framework are lower than those realized under the centralized decision model; hence, the wholesale price contract cannot coordinate the supply chain. Nevertheless, the designed coordination contract mechanism coordinates the supply chain efficiently and realizes a flexible distribution of benefits between the farmer and the retailer. Furthermore, when the revenue-sharing coefficient meets specific conditions, both the farmer and the retailer achieve a win-win situation. Finally, we verify the coordination contract design using numerical simulations and analyze the effects of SA and WA preferences on decision-making and the supply chain expected utility. This study provides theoretical guidance for the coordination mechanism design of agricultural supply chain with capital constraints and behavioral preferences.

Insights into the impacts of and responses to COVID-19 pandemic: The South African food retail supply chains perspective

Background: With the observed cases of the coronavirus disease 2019 (COVID-19) pandemic in South Africa, coupled with varying levels of national lockdowns, food retail supply chains in South Africa were adversely affected. The pandemic affected international travel, global logistics, supplier production and stockpiles at the supply end, which resulted in shortages at retailers and increased prices for basic food items.Objectives: The purpose of this article was to provide insights into and a synthesis of the impact of the COVID-19 pandemic on food retail supply chain models in South Africa.Method: A general review of both academic and grey literature (including commentaries) was studied to draw insights into the issues of food retail supply chain. This was combined with an examination of websites and annual reports of the major food retailers in South Africa to find their responses to the pandemic related to their supply chains.Results: It was found that the investment in supply chains and local supply development and the technology by the large food retailers in the country have paid off in the ways that they have been able to respond to and contain the shocks of the pandemic and point to the local versus the international when thinking about new supply chain models for the post-COVID-19 world.Conclusion: The insights drawn from this article may be useful in building more resilient food retail supply chains in the South African context. This article charts a way for more focused analyses using empirical data to thresh out more nuanced insights that will benefit the food retail supply chain and create a more resilient food system in South Africa.

Examining the impact of service recovery resilience in the context of product replacement: the roles of perceived procedural and interactional justice

PurposeGiven increasing customer expectations and disturbances to product returns management, capabilities such as supply chain resilience (SCR) can complement service recovery strategies in retail supply chains. This study utilizes procedural justice theory (PJT) to conceptualize service recovery resilience as a capability that allows firms to meet customer requirements when dealing with disruptions, and empirically investigates its impact on procedural and interactional justice and customer outcomes (i.e. satisfaction and loyalty) in the context of product replacement.Design/methodology/approachThis research employs two scenario-based experiments using a sample of 368 customers to explore the outcomes associated with service recovery resilience.FindingsThe investigation shows more satisfied and loyal customers when a retail supply chain can overcome service recovery challenges through SCR. The study shows that customers evaluate not only the process itself, but also their interactions with the retailer. Specifically, procedural justice and interactional justice have a significant influence on these relationships.Originality/valueThis study proposes service recovery resilience as a concept that bridges service recovery theory with supply chain strategy in the unique context of product replacement. Further, this study also notes how information enhances customer satisfaction with the retailer's effort to address disturbances in the recovery process. Finally, this study informs managers on the capabilities needed to face new customers' needs.