We all know how the COVID-19 supply-chain story goes. The supply chain cracked under the immense pressure and disruptions that COVID-19 pandemic caused. A shortage of toilet paper and other essential supplies catapulted the supply chain into the worldwide spotlight. But for those of us who have worked in the industry for decades, we knew it was broken and on the brink of collapse long before 2020. It just needed the weight of something large to crack everything wide open. What came next was a significant transformation that was truly long overdue.
The Rise of Direct-to-Consumer
In the years since, we have continued to see an evolution. Now, in February 2024, a new report suggests more than two-thirds of executives in commerce and supply-chain businesses across North America say their organization’s investment in direct-to-consumer has increased in the past three years.
The report comes from Deposco and polled 200 senior decisionmakers from commerce and supply-chain organizations across North America. Perhaps more telling is that 22% of these businesses openly admit their direct-to-consumer sales have increased by more than 50% in the past 12 months alone.
There are many factors influencing this trend. For one, the customer experience is king today, with many businesses looking to engage the customer in new and amazing ways. Consumer insight is a big focus in North America, where 32% say having access to more customer data to drive business strategy is a top driver of direct-to-consumer across their industry sector.
To deliver on this promise, 35% say using technology and creating realtime visibility across all inventory locations to fulfill customers’ expectations is critical to protecting businesses from failing to fulfill customer expectations.
The Rise of Zero Consumer
Another big trend to watch is the growing interest in zero consumer, which is someone who scrimps and saves on lower-cost items, but indulges in the occasional luxury purchase. Deposco suggests these consumers often don’t have loyalty to any one brand and that has made retail brands more focused on getting to know their consumers.
McKinsey & Co., also points out that the zero consumer demands the full “phygital” experience, meaning they want retailers’ physical and digital offerings to be consistent and seamless. As a result, many companies are turning to digitization and advanced analytics to enable hyperpersonalized experiences. This includes leveraging ML (machine learning) and generative AI (artificial intelligence).
Still, even with technology, people still need to be at the center of the transformation. Humans will enable the digital transformation to happen. If we can achieve this, we will ultimately have stronger supply chains. It will come only when we leverage the right technology to heighten visibility, transparency, and resilience and upskill and reskill the right workers. Together, this will be a powerful combination to prepare our supply chains for a better tomorrow.
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