Market evolution requires companies to meet product and service demands, and it is precisely here that logistics can make a difference. Just think about what happened in the modern and normal trade.
Retailers tried to cut out intermediate structures (wholesale markets) to source the products directly from producers, while in normal trade (wholesale and small retailers), markets still play an essential role. Logistics thus becomes a determining factor.
Those capable of reducing logistics' inefficiency will win the challenge. Those capable of conveying the highest added value to products will gain the trust of final consumers, whether by developing attractive packaging or safeguarding the freshness of products. In both cases, quality must meet expectations.
"In modern trade, retailers find a central link in distribution platforms. Of course this system has worked well, but there are still some dysfunctions that affect management and, therefore, final results. The fresh produce sector is the one causing most problems for supermarkets as well as consumers," explains Valter Vannucci (in the photo), Director of Centro Agro Alimentare in Rimini.
It must be said, though, that the great organisational effort put in place did not generate a suitable level of satisfaction in consumers or distributors. Though it must be said that many things were done to improve supply and results have been satisfactory in most cases. It must also be noted that, despite everything, the modern channel seems to be the most active for what concerns studies, analyses, market research and innovation.
The same cannot be said for normal trade as, while quality is good, there is still too much resistance to aggregation, the creation of new services, investments and quality/price uniformity. This in turn means goods can "change every day with prices varying depending on demand and supply."
Traders are not always willing to plan activities, innovate, develop projects, invest, offer new services, etc. because often they want to maintain their positions without realising that their achievements are the perfect base to move forward.
The same cannot be said for normal trade as, while quality is good, there is still too much resistance to aggregation, the creation of new services, investments and quality/price uniformity. This in turn means goods can "change every day with prices varying depending on demand and supply."
Traders are not always willing to plan activities, innovate, develop projects, invest, offer new services, etc. because often they want to maintain their positions without realising that their achievements are the perfect base to move forward.
These are therefore the limits of the two types of trade - in retail, expected performance levels, similar to those in other sectors, have yet to be reached.
Vannucci feels "fragmentation in the production world does not go well with the uniformity and standardisation required by retailers, for which 'industrial' production systems would be needed. This in turn means that often produce 'travels' between territories and platforms and arrives in stores 'tired'. But there is also the difficulty of following the seasonality and variability of nature, which is not always aligned to the strict planning, which requires stable assortments and prices."
On the other hand, normal trade is often characterised by "precarious" organisational systems with low packaging uniformity, difficulty of perceiving deliveries as an integral part of the product-service, low rates of voluntary quality checking and scarce aptitude towards long-lasting trade agreements.
"In most cases, wholesale companies started as family businesses and are not always willing to aggregate or reach an organisation level now essential to compete in an increasingly globalised market."
With all of these phenomena, we can see how important logistics is, both in modern and normal trade.