How to Adapt to Inflation with 3PL Solutions

How to Adapt to Inflation with 3PL Solutions

In the face of escalating inflation and a persistent decline in retail sales across Australia, retailers are under immense pressure to adapt their business strategies. Retailers across Australia are feeling the strain of the ongoing cost-of-living crisis, with retail sales witnessing a continuous decline over the past nine months. According to data from the Australian Bureau of Statistics (ABS), retail sales plummeted by 0.5 percent in the June quarter, marking a troubling trend following declines of 0.8 percent in the March quarter and 0.4 percent in the last quarter of 2022.

The escalating inflation rates are exerting pressure on consumer spending habits, rendering customers more price-conscious in their purchasing choices. This shift towards prioritising essential items over non-essential or luxury purchases can significantly impact retail operations, affecting sales and revenue. 

Retailers must pivot their business strategies, with particular emphasis on optimising their supply chains through the utilisation of retail technologies.

How can retailers optimise their supply chains?

To counteract the impact of the cost-of-living crisis, retailers are focusing on providing excellent fulfilment services and optimising their digital stores to offer transparent and friction-free shopping experiences.

Retailers are leveraging third-party logistics (3PL) providers to optimise their supply chains and drive efficiency through various means, such as:

  1. Access to Advanced Technology
    3PL providers often invest in state-of-the-art technology and infrastructure to enhance supply chain operations. By partnering with a 3PL provider like AMS, retailers gain access to advanced inventory management systems, data analytics tools, and automation technologies that can streamline processes and improve efficiency.
  2. Expertise and Experience
    3PL providers like AMS bring specialised knowledge and expertise in supply chain management, gained from serving a wide range of clients across different industries. With their experience and industry insights, 3PL providers can offer valuable guidance and strategic advice to help retailers optimise their supply chains and overcome challenges.
  3. Scalability and Flexibility
    Retailers often face fluctuations in demand and seasonal variations, which can impact their supply chain operations. AMS offers scalability and flexibility to accommodate changing business needs, allowing retailers to scale up or down their operations as required without incurring additional costs. This flexibility is particularly beneficial during peak seasons or periods of high demand.
  4. Cost Savings
    Outsourcing logistics functions to a 3PL provider can lead to cost savings for retailers. 3PL providers leverage economies of scale to negotiate favourable rates with carriers, warehouse providers, and other service providers, resulting in lower costs for retailers. Additionally, 3PL providers help retailers convert fixed logistics costs into variable costs, allowing them to pay only for the services they use.
  5. Focus on Core Competencies
    By outsourcing logistics to a 3PL provider, retailers can free up valuable time and resources to focus on their core competencies and strategic priorities. With logistics operations handled by a trusted partner like AMS, retailers can devote more attention to product development, marketing, and customer engagement, driving business growth and innovation.

AMS eGroup’s 3PL services encompass a wide range of capabilities, including warehousing, order fulfilment, shipping and distribution, and reverse logistics. We leverage state-of-the-art facilities, advanced technologies, and a dedicated team of logistics professionals to empower retailers to overcome the complexities of modern retailing.

Amid rising inflation and declining sales, retailers must swiftly adapt their strategies to optimise supply chains. Partnering with third-party logistics (3PL) providers like AMS offers access to advanced technology, expertise, scalability, and cost savings. 

AMS eGroup stands ready to support retailers in navigating these challenges, empowering them to thrive in the evolving retail landscape.