Retail Industry Challenges

I was in a Tesco store a couple of days ago and saw this Retail Media display on a side wall. The quadruple screen was located above four pallets of beer and had a scrolling loop of different adverts. This is a Tesco Extra store, so it's bloody huge, and therein lies my first issue with the location of this display. Cadbury creme eggs are featured on screen, but the product is several aisles away. In reality, a shopper might notice this advert and be curious. Then they turn around and remember they need some soft drinks...oh and some washing powder, which are nearby. And the moment that happens they forget about chocolate. Proximity is key in a supermarket otherwise shoppers get distracted by other products they need to buy. The Coca Cola advert, punctuation error aside, is a nice nudge for shoppers, but there is no explanation of the QR code. Why should I use it? What will I discover? It's Coke, I am shopping, it's two aisles away if I want some. And finally the Corona beer advert, has a useful call to action 'find us in the drinks aisle', even though there is a pallet full of Corona right under the message. I have my reservations about Retail Media Networks, the biggest being the relevant application of content on screens. And this visit to Tesco confirms my concerns. If the content isn't in the right place, at the right time, saying the right thing, it won't work, and brands will be reluctant to reinvest. #RetailMediaNetwork #InStoreCommunication #ISRC

Never judge a business by its front office but by its back-end logistics. Managing sourcing across India, Pakistan, and Bangladesh has taught me that logistics isn't just about moving boxes—it's what makes or breaks a retail operation. Here's why: The global logistics market hit $9.2 trillion in 2023, with Asia-Pacific contributing 42% of this value (McKinsey Global Institute). Yet, companies lose 20-30% of their logistics costs to inefficiencies. (McKinsey & Company) The real cost of weak logistics shows up in: → Inventory Stockouts: 8.3% of retail sales are lost to out-of-stock situations, costing retailers $1 trillion annually (IHL Group)  → Dead Stock: The average retailer ties up 25% of working capital in excess inventory (Gartner)  → Broken Promises: 69% of customers won't shop with a retailer again after a late delivery (Retail TouchPoints)  → Emergency Shipping: Rush shipping can cost 5-10x more than standard rates (Deloitte) In 2024, due to various disruptions in logistics caused by war, instability, and climate change-induced natural disasters, I witnessed firsthand how fragile supply chains can be. Geopolitical turmoil, including events like the Red Sea Crisis and the Ukraine conflict, further exacerbated these disruptions, underscoring the critical need for resilient and adaptable supply chain strategies. Companies with robust logistics weathered the storm, while others faced existential crises. Today's successful businesses need: 📌 Strategic warehouse placement near key markets 📌Real-time inventory tracking across locations 📌Multiple transport routes for critical supplies 📌Robust risk mitigation plans In my experience, managing an annual sourcing volume of $100 million, the difference between profit and loss often comes down to one question: Can you get your product where it needs to be when it needs to be there? What's your biggest logistics challenge? Share your experience below. #SupplyChain #LogisticsManagement

🚀 Walmart’s E-Commerce Surge: $121B in 2024, Profitability Achieved! 💰 While Amazon often dominates e-commerce headlines, Walmart has been quietly revolutionizing its online presence: • $120.9B in online sales in 2024, marking a 21% year-over-year increase. • E-commerce now constitutes 18% of total revenue, up from 13.6% in 2023. • A remarkable 47% growth in just two years. The catalyst? A strategic overhaul of their supply chain and delivery systems: • Transitioned from traditional ZIP code mapping to a honeycomb-style hexagonal system, enhancing delivery efficiency. • Expanded same-day delivery reach to 93% of U.S. households, with plans to achieve 95% coverage by end of 2025. • The Spark delivery platform, leveraging geospatial technology, added 12 million new households to its network in January alone. These innovations have led to significant operational efficiencies: • 30% of U.S. orders now utilize fast delivery options. • Delivery cost per order decreased by 20% in Q4. • Walmart’s U.S. e-commerce sector achieved profitability for the first time in Q1 2025. David Guggina, Executive VP and Chief eCommerce Officer, emphasized the “flywheel effect”: “When customers choose fast delivery, they shop more frequently, buy a broader range of items, and basket size increases.” This transformation underscores a pivotal lesson for retailers: Seamless integration between physical stores and e-commerce platforms is not just beneficial—it’s essential. Walmart’s journey from a traditional brick-and-mortar giant to a formidable e-commerce contender exemplifies the power of strategic innovation and adaptability. #Ecommerce #RetailInnovation #DigitalTransformation #Walmart #SupplyChain #Logistics #Omnichannel #RetailStrategy

Hong Kong’s retail and F&B slump needs the attention of the government NOW. Here are some photos I took at Stanley at noon yesterday! Like the photo I took in Mong Kok night markets, the place was dead. The main strip was void of people. Restaurants were empty. And so many shops were closed. I had lunch at one of my favourite lunch spots (they do the best crepes in HK). The place is usually packed at lunchtime on the weekends. There were far more empty seats this time than usual. I asked the owner about his business. He said he was considering closing up shop. Why? We discussed the usual summer expat exodus, and the rising trend of locals travelling to Shenzhen and Guangzhou for the weekend for better-value - and more pleasant - experiences. But it really boiled down to one thing: RENT. There was zero interest from his landlord in passing on any rental reduction. ZERO. The vast majority of Hong Kong retail landlords couldn’t care less about their tenants. Because, unlike many other markets around the world, ownership is very concentrated in the hands of so few. And when these giant oligopolies are more concerned about maintaining the price of their properties on paper than the yield that the properties can generate, the “free market” no longer works. What ends up happening? Landlords prefer to keep their properties empty than allow businesses to operate at reduced rents that reflect economic reality. This spells disaster for Hong Kong’s small businesses. It puts the brakes on the economy. And it creates an awful experience for customers - both local and tourists - who need to walk through these ghost towns. I’m a capitalist through and through. But Hong Kong’s retail nightmare needs to end. I am openly calling for the Hong Kong government to consider two key policy moves at LegCo to address the retail and F&B crisis: 1. Retail rent control (less preferred option): to ensure landlord calibrate rents with retail consumption spend (e.g. linking rents to a retail index) OR 2. Vacant property tax (preferred option): slapping a punitive tax on landlords who keep their properties vacant, ensuring they set a rental rate that reflects the realities of the market. I’m sick of seeing my city on life support. And I’m not alone in saying this. #retail #dining #hongkong

You think Shein is just another fast fashion company. But really they are one of the biggest technology companies you've never truly understood. Here are 3 things that this Chinese-owned fashion giant did to be worth more than H&M and Zara combined! 👇 👉 Shein uses its own proprietary tools along with Google trends to figure out what styles are trending through search and social media. These then go to their team of 800 designers who create designs based on the styles. Designs are created within 36 hours. Social trends generate hype before the item has even been produced by Shein. This is incredibly smart...they sell into pent-up demand for a certain style. Then their products leverage that hype to build more hype but this time specifically around their brand. 👉 Shein creates small batches of products - as small as 10 pieces then put them on their site. Then using AI, they're able to track behaviour like browsing product details, the number of add-to carts, and how long people spend on a particular product. All their 3000 suppliers are given access to Shein's ERP platform which allows them to see in real-time what products are being clicked on the most, then instantly create more of those. This real-time model reduces the time from design to finished product to 3 days and drastically reduces excess waste. To give some context, their nearest competitor Zara takes 5 weeks and that's considered fast. There is fast fashion...then there is supersonic fashion. 👉 Shein adds over 1000 new styles every single day in over 220 countries! To put this into context, Zara adds 300 per month. In reality, Shein is really an optimisation machine - ingesting what we like then feeding us more of that...and doing it in a localised way. There is a second algorithm that weighs how deep the actions are of a user on a site - a product which has more viewing time has a higher weighting than one which people merely clicked on for 2 seconds. This then leads to the user being shown similar products. You and I could go on Shein and be shown drastically different products due to our browsing data. If this hyper-personalisation sounds very similar, it's because there is another super app launched in China which has the same thing... TikTok. -- It’s no surprise why Shein has been called The TikTok of commerce. Whether you love them or hate them - and there are many reasons to hate them - you can’t deny that they’re building the future of what commerce looks like. Commerce is moving from a human-designed POV and moving to what the machines tell us. I believe that's generally where consumption is moving, when there is so much choice, let the algorithms decide. There will be no need for human curation. Even more important, I believe we're just at the beginning of this wave...

'Africa' doesn't exist. The continent's 1.5 billion consumers and $3 trillion in GDP are deeply fragmented into mini-markets. That means: ⬥ Duplicated costs & capital inefficiencies — The distance between Lagos and Nairobi is shorter than the distance between San Francisco and NYC, but the overhead of operating the city pair is multiplied. ⬥ Regulatory complexity — The patchwork of regulatory regimes/frameworks, standards, and requirements creates enormous friction for companies. ⬥ Barriers to scale — The economies of scale that define modern business are hindered by artificial borders, resulting in relatively few truly pan-African giants. Fragmentation may just be the single biggest impediment to widespread economic growth across the continent. So the most revolutionary act in African business isn't disruption — it's integration. Agree or disagree? (cc: Afridigest — afridigest.com/subscribe — intelligence@afridigest.com)

Amazon is closing its 19 grocery stores in London. They pioneered till-free shopping. Less than five years after their launch, they’re gone. At the time, these stores were seen as the future. ↳ Cameras scanned your movements. ↳ Your purchases were tracked. ↳ You paid automatically. (You had to log in at the turnstile with your Amazon details). While people were still getting used to self-checkouts, Amazon had leapt even further ahead. But that vision hasn’t come to pass. Why? This looks like technology for the sake of technology. Amazon invested in something customers didn’t need. Arguably, they didn’t even understand it. Was the experience really better than a well-run self-checkout? I doubt it. It reminds me of Tesco’s Fresh & Easy misstep in the US. ↳ Launched in 2007 under Sir Terry Leahy. ↳ 200 stores opened. ↳ More than £1bn lost. The novel concept failed – a sad counterpoint to Tesco’s huge UK success at the time. I also wonder why Amazon needed 19 UK stores before pulling the plug. Did it really take that many to test the idea? They took too long to make the call. (Some stores are now being converted to Whole Foods). I’m a believer in ‘Bricks and Clicks and Paper’. An omni-channel model where customers find you online and on the high street. That seamless experience matters. (This is Step 4 in my book How to Make a Billion in 9 Steps). In this case, the tech was too novel. It didn’t solve a deep customer need. And let’s not forget – grocery is one of the toughest markets anywhere. ↳ Low margin. ↳ Fierce competition. Players like Morrisons, Tesco, Aldi and Sainsbury’s have decades more experience than Amazon. Amazon has travelled a long way from selling books to selling vegetables. Like any great company, it experiments. And sometimes, it gets it wrong.

Increases in labor costs, higher interest rates, negative same-store sales, years of negative EBITDA, flawed real estate strategies, high food prices, customers cutting down on dining out, and COVID lingering government support withdrawal are some of the factors chains and franchisees were unable to surpass and leading to a soaring number of restaurant bankruptcies in 2024. From the restructuring of large chains such as Red Lobster, Rubio’s, and Tijuana Flats on the one hand, and franchisees unable to make the unit-economics work (including franchisees for Popeyes, Arby’s, Pizza Hut, and Subway) on the other, bankruptcies can be seen across categories and segments. We are seeing this play out in many geographies. Despite the pain and pressures of challenging conditions, it seems like in some organizations it hurts less to remain indecisive — holding one's breath waiting for the situation to improve itself – than it does to bite the bullet on bolstering the team, capabilities, competencies, and critical thinking that’s needed to confront the issues head-on. It somehow hurts less to lose millions slowly over many months than to plunk down a few hundred thousand to get the shot in the arm that’s so desperately needed. Our advice? Waiting may hurt less, but it costs a lot more in the long run. #restaurants #bankruptcies #strategy

We’ve all seen it — the cluster of e-bikes and e-scooters lined up outside a chain restaurant, their riders waiting for the next order to ping. It’s become part of the urban landscape. But it’s also a reminder of how the delivery economy is quietly reshaping our cities. As more people order in, restaurants shrink their dining rooms and reconfigure for takeout. Independent operators struggle as delivery apps eat up thin margins. And as costs rise, local storefronts give way to chains that can absorb the fees — or to “ghost kitchens” with no public presence at all. The result? Fewer local jobs, fewer gathering places, and more of our public realm turned into waiting rooms for tech platforms. Meanwhile, the profits flow to tech platforms, while the risks — injuries, congestion, unsafe streets — are borne by the riders, the pedestrians, and the communities they move through. If we want main streets that feel human again, we need to start asking who really benefits from all this “convenience” — and who’s paying the price. https://lnkd.in/gDzJusmT

In every boardroom I’ve sat in this year, the same conversation surfaces: why are category leaders losing momentum and how are challenger brands stealing share? After spending several decades in big corporate environments, the uncomfortable truth is that many traditional FMCG models were built for a market that no longer exists. We engineered for distribution advantage, built brand equity on TV and designed innovation pipelines with long lead, linear innovation cycles. But the new rules of growth are different. And they’re being written, unapologetically, by challenger brands. Here’s what I’m observing: · Private labels and challenger brands are reshaping the game. · Challenger brands don’t just compete. They reframe the category narrative. · They prioritize speed, not polish. Connection, not campaigns. · Packaging is now a media channel. Your shelf presence is on an iPhone screen. · Challenger brands leveraging social-native marketing are achieving 2.5x engagement at ~35% lower CAC than traditional FMCG. So what’s the real challenge? · Incumbents are often playing defense with structures designed for scale, not speed. · Innovation and Go-to-Market are still linear. · Talent is optimized for predictability, not fluidity. · Leadership often lacks the mandate to disrupt the very models they’ve built their careers on. · Digital remains elusive. They are still operating with an old-world marketing model This is where strategic leadership must evolve. I’m not suggesting we throw out what works. But we must build ambidextrous organizations capable of defending core businesses while addressing challenger brands. Corporations must embrace the new marketing model to succeed: · Build brand equity through content-led marketing that is culturally relevant. · Create influencer partnerships that help build brand cachet and extend reach. Creators are not simply media buys; they are brand builders. · Build tribes. Consumers are no longer just audiences; they are co-creators. Smart brands involve them in product development and foster identity-driven communities. · Build capabilities for precision targeting. It’s not just about reaching more people; it’s about being relevant to the right people. · Design a turbo-charged innovation model. Shorten the feedback-to-launch cycle and innovate in rapid sprints rather than traditional stages. · Accelerate cultural cachet through bold, attention-grabbing strategic brand collaborations and partnerships. In my view, the winners in this next chapter of FMCG won’t be the ones who defend their legacy the hardest. They’ll be the ones who evolve the fastest without losing the core. It’s about building businesses that earn their next era of relevance with new capabilities, new talent models, and new definitions of brand value. Because at a time when every consumer decision is a referendum on purpose, accessibility, and authenticity…being big doesn’t make you safe anymore. It just means you have more to unlearn.