From a new couch to a week’s worth of groceries, shoppers can summon nearly anything to their doorstep, local store or delivery locker with just a few clicks. Some of the most significant consumer changes impacting supply chains include:
- Shifting demographics. While in-store purchases still dominate among shoppers of all ages, younger consumers are continuing to migrate to e-commerce, underscoring the importance of a strong omnichannel supply chain.
- Shifting buying patterns. Emerging trends, including subscription boxes and purchasing large-scale items like furniture online, are creating complexity and forcing businesses to reexamine their last-mile strategies.
- Shifting technology. In a role reversal from the last few decades, consumers are pulling ahead of businesses when it comes to technologies like artificial intelligence. These tech-savvy customers expect connected yet frictionless experiences from their brands – forcing many businesses to play catch-up.
Increasing agility through technology
Faced with these pressures, business leaders recognize that agility will be the key to success in the coming years. A KPMG survey found that 68% of CEOs believe that being slow to adapt to change will lead to obsolescence, while Gartner revealed that 82% of CEOs intend to change their business models by 2020 to stay relevant.
For supply chains, a technology-enabled approach is essential to drive agility and keep up with consumer demands. According to a World Economic Forum analysis, digital transformation will generate $1.5 trillion in value for the logistics industry over the next five years. Among businesses that adopt digital supply chains, executives report a 3.2% average increase in annual earnings – the highest ROI of any business function.
As supply chain executives recognize the importance of technology investment, an analysis conducted by AGL and Logistics Trends & Insights found that total logistics IT spending will rise 17% to $87.8 billion between 2017-2022. Yet a data-driven, agile supply chain remains a dream for many businesses, with a significant number of organizations still relying on Excel and email to manage complex supply chain functions. For organizations that master digital transformation in the supply chain, the benefits are big – faster time to market, increased efficiencies and better customer experiences.