Regional Supply Chain Modernization: North America vs. Europe
In today’s rapidly evolving retail landscape, supply chain modernization is not a one-size-fits-all journey. North America and Europe, while both facing seismic shifts in consumer behavior and operational challenges, have charted distinct paths in how they adapt, innovate, and future-proof their supply chains. Understanding these regional nuances is essential for retail leaders seeking to drive resilience, profitability, and customer loyalty in their markets.
Diverging Consumer Preferences: Click-and-Collect vs. Home Delivery
One of the most visible differences between North American and European retail lies in how consumers prefer to receive their purchases. In North America, the pandemic accelerated a massive surge in click-and-collect (BOPIS—Buy Online, Pick Up In Store) and curbside pickup. Retailers who had invested early in these capabilities, such as Target and Walmart, captured significant market share as consumers sought safe, convenient, and immediate fulfillment options. The expectation for same-day or even same-hour pickup became a new standard, especially in grocery and big-box retail.
In contrast, while click-and-collect also grew in Europe, there has been a stronger and more sustained preference for home delivery, particularly in urban centers with higher population density. European grocers and general retailers have invested heavily in expanding delivery slots and optimizing last-mile logistics. As infrastructure matured, many consumers shifted from click-and-collect back to home delivery, valuing convenience and a willingness to pay a premium for express service. This divergence is shaped by geography, urbanization, and cultural expectations around service and convenience.
Supply Chain Adaptations: Micro-Fulfillment, Vertical Integration, and Last-Mile Logistics
Both regions faced unprecedented supply chain challenges, from global shipping bottlenecks to labor shortages and unpredictable demand spikes. However, their approaches to adaptation have varied:
- North America: Large retailers responded by leveraging their store networks as micro-fulfillment centers, enabling ship-from-store and flexible inventory allocation. This unified commerce approach allowed retailers to optimize inventory across channels, reduce delivery times, and mitigate the impact of warehouse constraints. Investments in real-time inventory visibility and dynamic pricing became critical to maintaining profitability amid margin pressures from increased shipping and returns. The use of AI-driven demand forecasting and cloud-based platforms enabled rapid scaling and agility, as seen when major grocers doubled online order capacity in days to meet surging demand.
- Europe: European retailers have increasingly explored vertical integration and nearshoring to regain control over their supply chains. The pandemic and events like Brexit exposed the vulnerabilities of long, global supply chains. As a result, some European brands have moved manufacturing closer to home, or even in-house, to ensure product availability and reduce exposure to international disruptions. This trend is particularly evident in grocery, where companies have benefited from owning more of their supply chain, resulting in greater resilience during periods of scarcity. Additionally, European retailers have invested in micro-fulfillment centers and advanced last-mile logistics to support the sustained demand for home delivery.
Regulatory Environments: Returns, Data, and Consumer Protection
Regulatory differences further shape supply chain strategies:
- Europe: Strict consumer protection laws require retailers to offer free returns in many cases, which can erode margins—especially as online returns spike during peak seasons. This has driven European retailers to invest in smarter returns management, including automated decision-making about whether to accept returns, encourage in-store drop-offs, or even allow customers to keep low-value items rather than incur the cost of reverse logistics. Privacy regulations such as GDPR also require careful compliance and investment in robust data infrastructure.
- North America: Retailers have more flexibility in setting return policies. Some have experimented with charging for returns or offering incentives for in-store returns to reduce costs. The regulatory environment allows for more experimentation in data-driven personalization and marketing, though evolving privacy expectations are prompting increased investment in data governance.
Omnichannel Fulfillment: Meeting Customers Where They Are
Both regions recognize that today’s shoppers expect seamless movement between online and offline channels. Omnichannel fulfillment—encompassing ship-from-store, BOPIS, curbside pickup, and home delivery—requires sophisticated orchestration of inventory, orders, and logistics. Retailers must determine the most efficient fulfillment path for each order, balancing speed, cost, and customer preference.
- North America: The focus is on integrating store and digital operations to enable flexible fulfillment and real-time inventory visibility. AI and cloud-based systems support dynamic allocation and rapid scaling, ensuring that retailers can meet surges in demand while maintaining profitability.
- Europe: The emphasis is on optimizing home delivery infrastructure and leveraging micro-fulfillment centers to support express and scheduled options. Vertical integration and nearshoring enhance supply chain resilience, while technology-driven returns management helps protect margins in a strict regulatory environment.
Lessons for Retail Leaders: Agility, Data, and Customer-Centricity
Despite regional differences, the common thread for supply chain modernization is agility. Retailers who can quickly sense and respond to changing consumer behaviors, supply chain shocks, and regulatory shifts will be best positioned to thrive. Key takeaways include:
- Invest in real-time inventory visibility and AI-driven demand forecasting to optimize stock levels, reduce waste, and improve customer satisfaction.
- Leverage micro-fulfillment and flexible fulfillment models to meet evolving consumer preferences, whether for click-and-collect or home delivery.
- Strengthen supply chain resilience through vertical integration, nearshoring, and robust data infrastructure.
- Innovate in last-mile logistics and returns management to balance cost, convenience, and regulatory compliance.
- Place the customer at the center by offering flexible fulfillment, personalized experiences, and seamless journeys across channels.
The Path Forward
As the lines between digital and physical retail continue to blur, the most successful retailers in both North America and Europe will be those who embrace regional strengths while learning from each other’s challenges. By investing in technology, data, and customer-centric strategies, retail leaders can build more resilient, responsive, and profitable supply chains—ready to meet the demands of a dynamic global marketplace.
Publicis Sapient partners with leading retailers across North America and Europe to design and implement regionally tailored strategies for supply chain modernization and digital transformation. Connect with our experts to discover how we can help your business thrive in the face of disruption.