Executive Summary

• This is the third report in our X Factor series on the major factors impacting the US retail industry. We believe supply-chain efficiency will be a key factor that will make or break a retailer going forward.
• Cost-cutting and enhancing operational efficiency are key areas that major US retailers have been emphasizing on their earnings calls these past few quarters, as the industry faces the changing preferences of consumers who are increasingly embracing online shopping.
• We have identified three key initiatives that are transforming supply-chain operations: optimization, speed and innovation.
• Digitalization will inevitably transform the way retailers operate brick-and-mortar stores, ultimately involving every stakeholder along the retail value chain.