Manhattan Associates is a Business Reporter client.
We are in the midst of a real-time, seismic shift in retail, as consumers transform expectations of global supply and demand models. First the pandemic and, more recently, the conflict in Ukraine, have exposed the fragility of many supply chain networks, not least an inability to sense and dynamically adjust to shifting demand signals, consumer preferences, labour, transportation and storage requirements.
The resulting economic and logistical havoc has forced many retailers to accelerate the transformation of store, digital, fulfilment and service experiences to win over consumers, boost employee productivity and increase profitability – all the while trying to balance increasing environmental obligations.
To say change is afoot is an understatement. Nevertheless, at the end of the day, the way revenue is generated fundamentally remains the same as it ever was: keep your store shelves stocked, online orders flowing smoothly and consumers happy.
The difference between today’s retail landscape and that of the past is that in 2023 there is more choice (of products, purchase options, fulfilment options, delivery options, payment options and more) but also more potential pinch points.
Consumers increasingly control the buying journey, making it that much more complicated for the brands serving them to meet expectations too.
If the picture wasn’t complex enough, many brands are still struggling to mitigate the effects of the aftershocks caused by the global pandemic (which include severe labour shortages in warehouses, at shipping docks and truck depots, and in stores with retail associates), while riding the increasingly choppy waters of an unstable global economic forecast.
There is also one more latent, passive shift that has taken hold over the past couple of years however, and this is perhaps shaking brands to their core more than anything else: an increasing emphasis demanded by consumers (driven primarily by the Gen Z demographic) for transparency in sustainability and “green” credentials.
Combined, today’s popular zeitgeist and the contemporary challenges we face are creating the perfect stage for what we like to call supply chain commerce.
Supply chain commerce is an emerging market category. At its core, it is about unification and a new way to solve the age-old problem of supply and demand, and moving goods from point A to point B. Crucially, it means re-engineering physical and digital supply chains to connect them and bring them in-step with consumer and societal expectations of greater responsibility.
In terms of demand, the past couple of years have seen vast numbers of consumers becoming more digitally aware, making purchases from physical stores, online, through mobile apps, social media platforms and even pop-up stores.
Time is at a premium and they expect brands to know their likes (and dislikes), serve them and fulfil their purchases how, when and where they want them. And purpose-driven buyers increasingly demand visibility of brands’ business practices, such as sustainability initiatives, often expecting to see tangible proof of the environmental impact associated with their purchases.
When considering supply, many brands still operate supply chains that pre-date omnichannel capabilities, with some still managing e-commerce and physical stores independently of each other. Optimised for individual use-cases and not agile enough to meet the continually shifting demands of modern consumers, these legacy systems simply no longer work in a digital-first retail landscape – both in terms of economics, but crucially from an environmental perspective too.
The shift in spending power towards Gen Z is one of the developments of our time. While generational changes are a regular occurrence, maybe no shift will be more seismic than the rise of this “Zoomer” group.
According to a recent article, Gen Z consumers are 38 per cent more likely to have shopped online in the past three months. They are willing to purchase across channels, have an appetite for higher-quality items and – just as importantly – are eager to stay on trend with cultural developments such as sustainability.
This awareness of societal trends is leading to some key generational spending markers as well. Zoomers believe that the generations before them represented overconsumption, capitalism and materialism, meaning they are more likely to associate themselves, and their wallets, with brands that match their core values, such as environmentalism, equality and fair trade.
Supply chains are undoubtedly one of the fundamental pillars that underpin globalised, capitalist consumer-driven markets, yet the relentless march of these ideologies are often cited as many of the primary causes of the climate emergency we face today.
In our minds, supply chain commerce represents more than the direct fulfilment of supply and demand: it creates new opportunities for brands to deliver greener, more sustainable products, shipping options and return choices to consumers.
It’s at work from the moment a person clicks on a buy-now button, to more-efficient packing processes that reduce wasted shipping space, to optimised transportation routing that reduces travel miles, trucks on the road and planes in the air. The end results are reduced CO2 emissions, exceptional customer experiences and greater alignment with consumer sentiments – all at the same time.
Unifying all elements of the buying journey, from warehouse and transportation, to point of sale and fulfilment, makes it all possible, and that is what gives consumers and brands the ability to make last-minute order changes or combine shipments right up until items leave the warehouse, store, dark site or microfulfilment centre.
Supply chain commerce gives the end-consumer tools to make greener, more sustainable purchasing decisions, and brands that do so will be rewarded.
We must not lose sight of the fact that the flow of goods around the world is vitally important to the livelihoods and wellbeing of billions of people. However, we also have a duty to recognise that the movement of goods can be inherently hard on the environment too.
Supply chain commerce offers economies, retailers and consumers all over the globe a “Sliding Doors” moment to take a different path. It represents a chance for consumerism to find its conscience and become a catalyst for a greener, more sustainable future where customer expectations and the health of our planet can, and do, coexist.
If you are interested in the opportunities presented by supply chain commerce, get in touch with the team at Manhattan Associates and find out how your organisation could benefit from a more unified supply chain.
