Dropshipping vs. Traditional Retail

"Just pick the cheapest vendor and move forward" - probably the most expensive advice I've ever heard in retail. Here's the truth: In retail, our vendors aren't just suppliers—they're the backbone of our success. One weak link in this chain, and everything from product quality to delivery timelines can crumble. I learned this lesson early at Falabella. But it truly hit home during COVID. While many businesses were scrambling due to broken supply chains, my experience was different. Because of my careful approach to selecting vendors—prioritizing reliability, trust, and mutual commitment to quality—I’ve never faced significant disruptions. Even during COVID, when many struggled to maintain operations, my vendor relationships became our safety net. After years of building partnerships across India, Pakistan, and Bangladesh, here's my vendor selection checklist: > First, I study the stability of their core team A revolving door of key personnel is often the first red flag. Then, I dive deep into their customer relationships—not just who they work with, but for how long. Long-term partnerships speak volumes about reliability. > But here's what many miss I make it a point to gauge the involvement of top management. Are the decision-makers actively engaged in operations? Because when challenges hit (and they always do), will they roll up their sleeves when things get tough? > Financial stability, of course, is non-negotiable But equally important is that intangible quality of mutual understanding—the knowledge that both parties are invested in each other's success. Here's what experience has taught me: The best vendor relationships aren't built on perfect performance metrics alone, but on the ability to navigate imperfect situations together. What's your non-negotiable criterion when selecting vendors? What's that one red flag that makes you walk away, no matter how good the numbers look?

Killer graph. The cost of the Budget headwinds facing the sector from the beginning of April is staggering - £5.56bn over the next financial year. We conducted a comprehensive piece of research in partnership with YOOBIC, which not only measures the impact of the Budget, but also quantifies its effect across the industry through rising consumer prices, pressure on margins, and highlights the strategies retailers are adopting to mitigate these challenges. £5.56bn - it's an astonishing figure. Changes to employer NIC contributions have the largest impact, adding £2.48bn to retailers' costs - made up of £1.9bn from the reduction in the threshold and £0.6bn from an increase in the rate. The uplift in NLW and NMW adds a further £2.4bn, while a reduction in business rates relief and the overall uplift adds another £0.7bn. I’ve spoken to many retailers about the extent of these costs, and it’s clear that this represents a structural shock - a resetting of the cost base. Rising labour costs have sparked widespread discussions around the implementation of technological solutions, which are now more easily justified by the increased financial pressure. When retailers consider how to mitigate these costs, our research revealed the three main levers they plan to use: ➡️ 31% of the cost impact will be passed on in the form of higher prices - equating to around £1.7bn passed on to consumers. ➡️ 32% will be absorbed in the form of reduced profits. This £1.76bn hit equates to roughly 6% of total industry profits. ➡️ 37% said they would attempt to offset the impact through cost optimisation strategies. However, passing costs on only works if a retailer has pricing power. In this climate, it’s increasingly difficult to pass on the full burden to consumers without some knock-on effect on demand. Our research shows that small retailers and pure online retailers were the least confident about passing on costs to consumers. Larger businesses felt more confident that this strategy could be effective. Cost optimisation is likely to focus on five main areas: ➡️ Efficiency and productivity ➡️ Pricing strategies ➡️ Financial engineering ➡️ Business model restructuring ➡️ Margin management Retailers are re-evaluating how they operate, where they operate, and who they operate with. Download the research for free here ⬇️ https://lnkd.in/e4_v4KjQ There’s so much more data and insight based on the experiences of over 100 retail leaders, outlining the tactics and strategies businesses are adopting to combat these challenges. I hope this helps some in the industry navigate these choppy waters!

Ocado Group and Kroger show the large fulfillment center model is losing ground Ocado’s shares fell 11% as Kroger announced a review of its warehouse strategy. For Ocado, this hits at the core of its growth model: large, automated Customer Fulfilment Centres (CFCs). The economics are tough to ignore: • Centralized automation helps lower OPEX. • But CAPEX is extremely high — each CFC requires years of investment before reaching scale. • Flexibility is limited compared to store-based fulfilment, which can react faster to demand. • Distribution costs are lower when fulfilment happens closer to the customer. • In grocery, speed of delivery is not optional — it is the key competitive factor. Why it matters: Kroger, with ~$150bn in annual revenue, is one of the largest grocery retailers in the world. When its interim CEO says “the bulk of our e-commerce is done by stores today,” it signals a pivot away from capital-heavy hubs. For Ocado, whose 2018 Kroger partnership was meant to showcase its global potential, this casts doubt on the scalability of its model in the world’s largest grocery market. Further insights • US online grocery penetration is still below 15%. The industry is in early development, and the capital-light, store-driven model currently looks more attractive. • Ocado grew revenue to £3.16bn last year (+13% YoY) and improved cash outflow, but it still posted a pre-tax loss of £375m. The gap between growth and profitability remains. • Analysts are split: Barclays stays “underweight,” while J.P. Morgan remains “overweight,” highlighting Ocado’s potential to strike new deals in Asia and the Middle East. The structural challenge is clear: scale and automation bring efficiency, but in grocery retail the decisive factors are proximity, adaptability, and speed. #retail #fmcg #ecommerce #retaitech #foodtech #omnichannel #supplychain #automation #grocery #strategy #investment #technology #robotics #distribution #logistics #sales #digitaltransformation #startups #futureofretail #consumergoods #retailtrends #retailinnovation #marketanalysis #ocadogroup #kroger #uk #us #europe #northamerica #asia #middleeast

A client came to us frustrated. They had thousands of website visitors per day, yet their sales were flat. No matter how much they spent on ads or SEO, the revenue just wasn’t growing. The problem? Traffic isn’t the goal - conversions are. After diving into their analytics, we found several hidden conversion killers: A complicated checkout process – Too many steps and unnecessary fields were causing visitors to abandon their carts. Lack of trust signals – Customer reviews missing on cart page, unclear shipping and return policies, and missing security badges made potential buyers hesitate. Slow site speeds – A few-second delay was enough to make mobile users bounce before even seeing a product page. Weak calls to action – Generic "Buy Now" buttons weren’t compelling enough to drive action. Instead of just driving more traffic, we optimized their Conversion Rate Optimization (CRO) strategy: ✔ Simplified the checkout process - fewer clicks, faster transactions. ✔ Improved customer testimonials and trust badges for credibility. ✔ Improved page load speeds, cutting bounce rates by 30%. ✔ Revamped CTAs with urgency and clear value propositions. The result? A 28% increase in sales - without spending a dollar more on traffic. More visitors don’t mean more revenue. Better user experience and conversion-focused strategies do. Does your ecommerce site have a traffic problem - or a conversion problem? #EcommerceGrowth #CRO #DigitalMarketing #ConversionOptimization #WebsiteOptimization #AbsoluteWeb

In the clutter of D2C brands, customization can make you win. Last weekend, I was trying to buy a gift for my friend's anniversary, but every option felt generic. Basic. Non-memorable. Then, I found a leather wallet and cardholder set online where I could add their initials, choose the leather texture, and even include a hidden photo inside. Suddenly, it became a gift they’d remember. This experience made me realize that as the landscape matures, we’re moving from an era of 'product-market fit' to 'product-person fit.' Here’s why I think mass customization is becoming the new competitive advantage in retail: 1/ The New Consumer Psychology Five years ago, customization was a luxury add-on. Today, it's becoming the baseline expectation. When I asked my teenage nephew why he refused a popular sneaker brand, his answer was telling: "If I'm wearing the exact same thing as everyone else, what's the point?" The data confirms it: > 60% of Millennials and Gen Z prefer customized products. > More surprisingly, they’re 4x more likely to recommend brands that offer customization. 2/ The Business Transformation The most fascinating insight I’ve discovered as an investor: Customization is creating an entirely new business model. Take Traya – they analyze your background, health, diet, and lifestyle through a 30-question diagnostic, then create regimens with 4x higher efficacy. The result? ₹7Cr → ₹300Cr in 2.5 years. Or Bombay Shirt Company – by letting customers design everything from the collar to the thread, they’ve achieved what seemed impossible: mass-produced customization at scale. 3/ The Economic Advantage When we analyze the unit economics, customized products are creating an unfair advantage: > Customer acquisition costs drop by 35% (word of mouth increases). > Return rates fall by 55% (customers keep what they helped design). My favorite examples: > Perfora’s name engraving on toothbrushes. > Mokobara’s luggage monograms (they started it). > Lenskart.com’s custom-fit frames. Yes, it adds cost and effort. But it makes you stop while you’re scrolling. And it makes the customer feel like the ONLY customer. That’s everything today. 😉 Which customized product experience has impressed you the most? #ConsumerTrends #Customization #Retail #D2C

Welcome to the Summer of Scarcity. New data from Flexport shows a staggering 60% drop in ocean freight bookings from China over the last three weeks. That’s not just a supply chain blip—it’s a clear signal of growing uncertainty at the intersection of trade, tariffs, and demand. Call it what you will—tariff fatigue, inventory overhang, strategic paralysis—but the reality is that brands are hitting pause. As one exec put it: “Why pay 145% in duties when I’m still sitting on inventory?” And they’re not wrong. The looming threat of increased tariffs, particularly in the U.S., is freezing forward momentum. Brands are hedging bets, burning through what they have, and hoping policy will ease before Q4 hits. But here's the problem: waiting is not a strategy. Now more than ever, ecommerce and retail brands need: 1. Hyperlocal visibility into supply and shelf readiness 2. Scenario-based planning that balances duty impact with demand volatility 3. Targeted media spend that focuses on high margin, in-stock products The brands that come out on top in this environment won’t be the ones who waited. They’ll be the ones who saw the freight cliff coming and got scrappy—leaner, faster, and more operationally precise. Scarcity isn’t just about product. It’s about confidence. And in this market, confidence comes from clarity. #ecommerce #RetailMedia #DigitalShelf #CommerceIQ

Big thanks to Matthias Winkenbach and Eva Ponce from MIT Center for Transportation & Logistics, and Christopher Huber from Interlake Mecalux, Inc. for an eye-opening session on the role of AI in eCommerce. One of the biggest shifts is how we think about warehouses. They are no longer just storage and distribution hubs. They are becoming omnichannel fulfillment centers. With customers demanding next-day or two-day delivery, centralized fulfillment isn’t enough anymore. The solution is micro-fulfillment centers near cities, providing both speed and flexibility, and AI is playing a critical role in enabling this shift. Another key challenge is returns. Reverse supply chains are extremely costly for retailers, yet often free for customers. Smarter fulfillment and inventory placement strategies are needed to offset these costs while still keeping the customer experience front and center. AI is starting to transform how supply chains make decisions. The transition is moving away from static forecasting toward real-time, dynamic decision-making: ▶ More accurate demand forecasts, shifting from months and week to days and hours ▶ Smarter inventory ordering policies that adapt dynamically ▶ Real-time fulfillment choices that optimize cost and service The benefits are significant: ▶ Lower operating costs ▶ Better inventory utilization ▶ Improved resilience through flexibility and dynamic routing ▶ Higher levels of customer satisfaction Of course, there are still big challenges to solve. Data quality is often poor and inconsistent across systems. Scaling from prototypes to live deployments is difficult. Complex models that aren’t explainable are hard for teams to trust. And moving from heuristics to data-driven methods requires strong change management to build user confidence and skills. On the robotics side, controlling a fleet of AMRs is exponentially more complex than managing a single robot. AI is helping through: ▶ Intelligent dispatching, assigning tasks based not only on proximity but also battery levels, workload, and priorities ▶ Collective memory, where robots learn from obstacles (like a blocked aisle) and dynamically redirect each other in real time ▶ Seamless integration with other machines and humans, aiming to reduce training requirements while boosting safety and productivity The big picture: the future of supply chain will be data-driven, automated, and adaptive. Success will come from blending advanced technology with human trust, transparency, and the right skills. If you want to dive deeper into these concepts, MIT CTL has two excellent courses coming up: Supply Chain Analytics (SC0x) and Supply Chain Fundamentals (SC1x). For a limited time, you can get 30% off course verification with the code SKILLSEDX25 through September 10. ~Mr. Supply Chain® #AlwaysBeLearning #SupplyChain #MITCTL #AI

Every ecommerce leader I know is running on the same hamster wheel: growth targets keep rising, but the rules of the game are being rewritten under their feet. When you place a leader and later sit down with them to swap insights, you’re reminded why the right talent shapes entire industries. I had a great conversation with Julian Exposito-Bader (ex-Amazon, TAG Heuer) about what’s really shaping the future of ecommerce, and he boiled it down to four pillars every executive should have on their radar: 1. Tariffs & Supply Chain Disruption Tariffs are no longer background noise. They’ve reshaped global commerce. Chinese manufacturers are redirecting from the US into Europe, flooding marketplaces with B-brands and copycats. Leaders who win will be the ones who diversify sourcing, master customs optimization, and use bonded warehouses strategically. 2. Sustainability as a Competitive Advantage It’s no longer acceptable to send a small product in three layers of plastic. Lastmile innovation (bike couriers, drones, reusable packaging) is moving from “PR play” to “bottom-line differentiator.” Zalando is pushing hard here. Consumers are watching, and they notice who’s lagging behind. 3. AI-Powered Commerce Revolution Gen Z isn’t Googling “best running shoes”, they’re asking ChatGPT or Alexa. LLMs are the new storefront. The question is: do brands have a strategy to influence those models? Add in 10-minute delivery in Southeast Asia (coming soon to Europe) and AI-driven fraud vs. fraud detection… the entire purchase journey is being re-engineered. 4. Channel Strategy & ROI Focus Social commerce is expensive and messy, but TikTok Shop is where the next generation buys. DTC remains the highest margin, but demands world-class storytelling. Amazon gives you traffic, but only if you’re willing to pour money into ads. And let’s not forget the “lipstick effect”, beauty keeps outperforming even when wallets tighten. The takeaway? Ecommerce leaders aren’t just choosing a channel anymore, they’re orchestrating these four forces simultaneously. For me, it was also a reminder of why the right hire matters: leaders like Julian don’t just react to market shifts, they anticipate and shape them. I’m curious, in your markets, which of these four pillars is hitting hardest right now? #ecommerce #fmcg #trending

One of the reasons why Supply Chains are complex systems is because most of the embedded variables follow Power Law distributions (with heavy tails). Our ability to respond to these variables cannot be based on assumptions that distort output, efficiency, customer delight. Power laws are statistical distributions where the probability of an event decreases polynomially with its size — i.e., P(x) ~ x^-α. In supply chains, power-law distributions emerge particularly in complex, networked, and self-organizing systems, where a few entities dominate and many have marginal impact. Below are key variables in supply chains that often exhibit power-law behavior: 1. Supplier Network Connectivity: The variable is the number of connections per supplier (or customer) and a few "hub" suppliers serve many customers, while most suppliers serve only a few — this is known as a scale-free network. The implication is vulnerability to disruptions at hub nodes (e.g., single-source risk). 2. Inventory Turnover or Stock Levels: The variable is inventory volumes or turnover rates across SKUs, and a small number of SKUs (fast movers) account for a large share of total inventory turnover, while many SKUs have very low or negligible turnover. The Implication is that it supports Pareto or 80/20 rule and differentiated inventory strategies. 3. Procurement Spend per Supplier: The variable is spend concentration by supplier and a few suppliers often account for the majority of the spend, with long tails of low-spend suppliers. The Implication is strategic sourcing and tail-spend management become necessary. 4. Order Size or Shipment Volume: The variable is distribution of order quantities or shipment sizes and most orders are small, but there are occasional very large orders (e.g., in project-based procurement). The implication is that it is important for capacity planning and transportation optimization. 5. Lead Times Across Suppliers or Products: The variable is variability in lead times, most lead times are short, but a few can be extremely long due to geopolitical, logistical, or capacity issues. The implication is that it drives the bullwhip effect; buffers and safety stock must be adjusted dynamically. 6. Disruption Impact or Recovery Time: The variable is duration or economic cost of disruptions, most disruptions are small, but rare events can cause massive cascading failures. The implication is that it highlights the need for stress testing and scenario simulation. 7. Warehouse Throughput: The variable is volume handled per facility, most handle small volumes. The implication is that Network optimization must consider throughput asymmetry. 8. Demand Across SKUs/Customers: The variable is sales or demand per product or customer, a few products/customers account for most of the demand. The implication is that it is important for segmentation, forecasting, and service level differentiation. Read my full article. #supplychain #variables #powerlaw #procurement

My SEO agency manages some of the top brands internationally. After thousands of audits, these 5 traffic-killers show up across every niche. Here’s how to fix them for quick ranking gains: 1. Broken or Flat Site Structures • Rebuild your main navigation with logical page groupings • Add subcategories based on real search behavior and tags • Create individual landing pages for each core service or product • Add breadcrumb trails to help both users and crawlers • Keep footer links focused and minimal to reduce crawl dilution 2. Strengthen Internal Linking to Avoid Orphan Pages • Map out all your URLs and find pages with zero internal links • Link from high-traffic blog posts to pages you want to rank • Add contextual links within paragraphs, not just footers or menus • Merge duplicate pages that dilute link equity across similar topics • Use descriptive anchor text that includes keywords naturally 3. Refresh Thin or Spammy Pages with Specific Content Additions • Use custom fields to add product specs, how-tos, or comparison points • Replace short service blurbs with expanded answers to buyer questions • Add FAQs, CTAs, and visuals like icons and tables for clarity • Prune outdated or AI-written content that adds no value • Schedule quarterly audits to review and update old posts 4. Improve Metadata and Sitemap Accuracy • Rewrite title tags to match search intent while encouraging clicks • Group blog content into categories and reflect this in your sitemap • Switch to a dynamic sitemap that updates when pages are added • Submit your sitemap in GSC and cross-reference it with robots.txt • Remove broken or spammy URLs that waste crawl budget 5. EEAT Pages and Signals That Actually Move the Needle • Publish a detailed About page that tells your brand’s story • Add a dedicated Reviews page with real testimonials and UGC • Link out to relevant authority sources to build trust • Show author credentials and publishing dates on blog posts • Create branded social profiles and link them on the site