Most retailers don't want to talk about it, but some companies are racking up millions of miles by sourcing internationally and then distributing from a location that is far away from the original sourcing point.
As a result, many of the products being sold into an overseas market have traveled to the UK from one of the key manufacturing hubs (such as China, India or Turkey) and then shipped back out again. As a result, some international retailers may find that 15 percent of their retail sales have twice the logistics cost of the other 85 percent.
Furthermore, these products will have taken longer to arrive, and may not be entirely suited to the market at that time. This then has a knock-on effect for full price sales, meaning more products get discounted. For any retailer operating in the fashion and convenience market, what is already a slim margin can therefore be wiped out completely.
Retailers that find themselves in this scenario will need to build much better distribution channels - but will first need to determine what demand can be expected from key markets. In order to achieve this goal, however, they will first need to review their internal processes and also get better data back from the market more quickly. Only then can they adjust their supply and distribution channels with confidence.
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