CSCMP's Supply Chain Quarterly
December 13, 2017
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Living in two worlds

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For logistics and supply chain executives, the convergence of the physical and virtual worlds in retailing will create some challenges.

Imagine shopping on your iPhone or iPad by walking through a virtual grocery store, complete with aisles full of products. You can walk around the store, just as you would across a landscape in an Xbox game. As you move down the virtual aisles, you pick up a virtual box of cereal and read the label before putting it in your shopping cart. When you're done shopping, you go to the virtual checkout counter and pay the virtual clerk.

And when you come home, the groceries you selected are already there waiting for you, in a special container by the door of your real-world residence.

This convergence of the physical and virtual worlds is an emerging trend in the retail industry. Some companies are beginning to explore the use of gaming technology to create an online experience that mimics in-store shopping, said PepsiCo Inc. Senior Vice President, Customer Supply Chain & Logistics John Phillips in his "Supply Chain 2020" talk at Dematic's 27th Annual Material Handling and Logistics Conference in early September.

For logistics and supply chain executives, this next frontier in retailing will create some challenges. Warehouses will have to keep in stock all of the items displayed on shelves in the virtual store. Moments after an order is placed, warehouse workers will have to pick the physical goods and then deliver them to the customer's home.

This concept may resemble a video game, but it's a trend to be taken seriously. The retail landscape is evolving at a faster pace than ever before and, as Phillips argued, the supply chain executives who will be winners in this technology-enabled environment will be those who master the convergence between the physical and virtual worlds.

James A. Cooke is a supply chain software analyst. He was previously the editor of CSCMP's Supply Chain Quarterly and a staff writer for DC Velocity.

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