Social Supply Chains and the Future of High Streets - Assignment Example

• Introduction

It is the dream of any company’s shareholder to not only to be the best in the provision of goods or services but also to grow to limitless boundaries. This has not been so as the majority of the retailers in the high streets have been facing numerous challenges and stiff competition (Chassay, and Case, 2003). However, one very important thing to learn from this is that most capabilities and proficiencies needed to excel in supply chain management are the same skills and abilities needed to shine at disaster relief operations.

With the incorporation of technology into the supply chain managements things are certainly now looking up. Social supply chain management seeks to integrate social network, data and relations into the supply chain system. Previous literature has partially defined social supply chains as a methodical detailing of its distinguishing features (Dixon and Marston, 2002). However, more emphasis is still needed as misunderstanding remains how it would be defined. This literature views the ‘social’ part of supply chains as entrenching social media into the existing supply chains. Over the previous decade’s business entities in the high streets have not been incorporating social networks. On the other hand, e-commerce has been taken up by competing companies outside the high street.

This essay focuses on Europe and specifically looking at the United Kingdom. The essay will further dig deeper into challenges retail businesses in the high street experience as they try to adapt to the highly raising digital economy. It will also expand on the growth and consumption patterns in the high street together with the shifting macro-supply chains trends.

• Incorporating the social supply chain into the high streets

Supply chain management involves integration and management of the flow of finances, products, and information concerning a business as they move from the manufacturer through different suppliers to the consumers. Social supply chains then incorporate social networking between the customers and the suppliers. This is what sustains successful and competitive supply bases (Fiske, 1991).

It is important to note that 78% of UK’s population is able to connect and access the internet (Janvier-James,2012). Therefore, most people now use online services to pay their bills, purchase online grocery and even compare products and prices from different retailers. The growth has continued exponentially. This is the findings of a research conducted by the Oxford online institute. In addition to this online retailing surveys show that by 2020 sales will have reached 62.7bn Euros (Doherty, et al., 1999). This growth will definitely have a major impact on sales for traditional shops hence the managements of these traditional shops which are mainly in the high street have to make management decisions to keep up with the rest of the businesses (Fukuyama, 1999). Below are the statistics of online retailing in Europe which has grown tremendously in the recent times. UK leads the online growth and it is important to highlight that the growth is picking up rapidly in other countries.

Fig !: Online retailing statistics in the UK

Source: Retailresearch.org. (2016).

Competition caused by the accelerating rise in the use of internet has led to low sales (Horvath, 2001). Many of the customers shifted to the online stores which were very convenient to them as most didn’t have to incur parking fees anymore. It is vital to note that online rates happen to be a lot cheaper and even flexible because they have no burden of paying rent which is very expensive in towns. The demise of the brick and mortar shops has been caused by social media which has altered the shopping habits. Customers have moved their preferences to the ‘click and flick’ rather than’ brick’.

A recent high street study conducted by the local data company in 2013 reported that Great Manchester is one of the highest hit regions. Additionally, by 2018, Wales will have 29% fewer shops than it had in 2012. London will have 9% of its shops closed down. This research is from the Center for Retail Research. The research goes further to state that total stores number in the UK will fall by 22% from 281,930 to 220,000 by 2018. With this stubbornly increasing rate more people will lose their jobs hence around 316,000 job losses (Kumar, 2001). With the death of the high streets which are now being replaced by homes, schools and betting places efforts are being made to save the businesses (Lamming, 1996). This is where social supply management comes in. this subject has become of significance in the recent past due to the increasing competition from firms and the ever changing technology

The supply chain is a model in which an ideological approach for studying today’s economic co-ordinations and how they are interconnected to the globalized world (Cooper et al 1997). A recent definition highlighted by McKechnie, (2006) defines supply chain management as ways that businesses are using today to organize and manage the functions of the traditional functions that are within and external to the supply chain with the aim of ensuring the company attains its goals and additionally with the aim of ensuring the company is competitive against other companies in the same industry. This usually leads not only in the improvement of the company’s internal and external operations but also the supply chain. (McKechnie, 2006)

With the world now being in the third industrial phase, and the internet growing rapidly most people having its access through the phone there are high chances that wholesalers, retailers and customers can connect online through a distributed virtual network (Moore and Neely, 2011). This would alter the macro-supply chain trends in the supply chain therefore can eliminate the transaction costs that are marked up at every stage of commodity transaction and production. The advantage of using supply chains brings about strategic planning and solving of ideas therefore giving insight to the quality of ideas (Ganeshan and Harrison 1995). An approach in the supply chain management to avoid risks is to bring together the suppliers and customers to work together. This brings about understanding between the two hence coming up with solutions. Case studies have been carried out to represent complex relationships and perspectives shaping both the future of internet and future cities (New, 1997).

Social media sites such as Instagram, Twitter, Snapchat, Facebook and pop-up shops have been the new methods that companies have used as supply medium to their customers (Nishat et al., 2006) Integrating the digital media to the shops gives the online shoppers a chance to feel, touch, experiment or try out the merchandise that they find online. By this the traditional shops do not have to close down. Although the shops have reduced, there are still chances of recovery. Pop sugar a well-recognized social site is one among the many which are giving online customers to be able to feel the products relate with them and make individual decisions about the products without the pressure of group thinking or peer convincing (Portas, 2011)

Local producers have the opportunity to go online with their initiatives. This give them a chance to inform a targeted customer audience about their products, their use, importance and why they should support the project (Ostgaard, and Birley, 1994). As producers try to meet the customer requirement and satisfaction, there’s the need for an actual location where the business owners can meet and hold interactions for the production of the products. This is where the high streets come in. The retail business owner then organizes for open days where co-creation takes place. Digital screens on the shop windows conduct surveys as they contain product related questions where the customers give their opinions of how they would like the model to look like, pricing of the products and also customer servicing of the shops.

This co-creation echoes the philosophies of supply chain models (Rowley, 2009). This is because the survey results are used to give opinions which are then recommended to the suppliers and producers for further analysis (Jenkins, 2006). Findings from the analysis are then used to create an imagined model of what the consumer want. The in-store experience should be customer friendly whereby customers would need to have the time to look at the goods without feeling like they are invading another person’s personal space. There should be 3D screens, virtual mirrors and Wi-Fi. Shoppers should additionally get the chance to use other social media to receive comments.

When retailers open social media sites for their businesses, they form a customer base which is of vital significance when making business decisions. The former traditional high streets have now been marked to be digital high streets. This makes the whole difference since they incorporate technology. Incorporating sites such as a Facebook fun page or a twitter handle allows customers to be transparent in their comments, this allows for multiple conversations as customers socialize (Jenkins, 2006). The social chains management consumes this information since it’s important to them as well. This co-consumption facilitates supplier’s management. (Jenkins, 2006)

The success of high streets is said to depend highly on the local economies health (Huang et al, 2000) The reputation of the surrounding regions where the high street is located is important as well. If for example there is no parking, no security on the route or there are no friendly cycling paths this will not attract customers. This is because personal experiences will be shared on social sites and people will be put off. Relocating to friendlier high streets in UK can also be a solution. Improving customer services and enhancing home deliveries improves the reputation of a business. The supply chain perspective behind this is logistics. Having a friendly environment will attract more customers.

• Case study: Amazon

Social supply chains need to be incorporated in the high street to revive the dying retail shops. Although the social aspect of supply chains has not fully been analyzed, it’s the social part that makes the whole difference. Going social provides a platform for suppliers and consumers to communicate. Through this customers’ preference are looked into and therefore this ultimately attracts customers more than the traditional stores

It is of significance to note that Amazon which were formerly purely online have realized the importance of having a brick and mortar in the high streets. The company has for decades been a major player in ecommerce and boosts of a large number of customers. However, despite this the company still wants to open up stores in the high streets with the aim of boosting its sales and additionally increasing the number of clientele who don’t utilize the online medium. It is vital to note the company has over 16000 thousand pick up points in the UK which are located conveniently to the customer. Further the company has locker banks which are also located conveniently in supermarket branches. Analysts have seen that the move by amazon to open up stores would allow the company to serve the customers efficiently. The company would offer a stiff competition to other online retailers as customers would have the privilege of ordering from online and picking their products almost immediately from the high street stores. As much as people want to shop online, there is still the social part of them where they want to meet other people and hold conversations away from their homes. The new Amazon digital high streets would provide the perfect location as opposed to the old ones.

The future of High Streets according to Schönwälder et al., (2003) is that the shops will not die out as long as they incorporate technology. Today’s technology has evolved from when computers have been the size of wardrobes to today’s minicomputers due to the 3D effect. The same way these computers evolved is the same process the social aspect of supply chains will go through before every retailer on the high street incorporates them. The evolution of the digital landscape gives the consumer a wider choice when it entails shopping (Schönwälder et al., 2003). Amazon will certain provide both a virtual presence and physical presence to its customers.

Online stores also depend on the high streets because they require an actual location where the customers can visit, review the products they saw online, have a chance to feel and touch them, ask detailed questions about the products, bargain on the prices and give their feedback on the products. It is certain the two are interdependent on each other although the social aspect of supply chains is most important. (Fukuyama, 1999).

Most companies have closed their physical stores due to the ever growing use of online shops. Based on this most of these shops have ended up becoming more and more irrelevant. Therefore, it is of essence to point out that the high streets will be required to shift from being areas where consumers can buy things to areas that the consumers can derive an outstanding experience and inspiration. Retailers in the high streets would therefore be required to come up with brand experience stores and showrooms which would allow them to present their brands and additionally allow consumers to acquire a pressure free and relaxed environment which allow them to buy more online. This model is what Amazon wants to adopt. Additionally, Apple has for years embraced this model therefore making it one of the most profitable companies not only in the phone industry but also in the world.

Many have anticipated to see how the internet retailing pioneer will organize its high street shops. It is certain that they will have a huge impact in the retailing world. This move would certainly send a huge message of having a high street presence for those companies that are online based. Therefore, how this company comes up with plans to design its collection points, showrooms, actual stock in the stores will greatly define how other competitors will reshape their strategies with the aim of ensuring they stay afloat from the competition.

• Conclusion

It is certain that there is a promising future for the digital high streets. Social supply management which brings together suppliers and customers through interactive networking is now the backbone of the high streets. Therefore, retail businesses located in cities and towns which have not yet welcomed this new perspective into their businesses are doomed. It is evident that as populations keep on congregating in major cities new innovative method will be required to be invented to curb the pressure on producing items. A new way of looking at the digital connectivity provides an opportunity to take advantage of the ‘co’ which is connection, congestion, and cooperative engagement. Retail business owners will have to learn to manage between the physical and digital as well as the demand and supply components in the organization.