Consumers are going to be the ultimate disruptor to supply chains and commerce between now and 2030, says Roadmap 2.0’s consumer section author David Schneider, supply chain consultant and founder of We Are The Practitioners –David K. & Schneider Company LLC.
“Historically, they have been the biggest supply chain disruptor, and they’re going to get worse,” he notes, citing consensus from the Roadmap 2.0’s 200-plus roundtable contributors who believe that the consumer will strongly influence the degree of disruption, rate of change and operational speed of supply chains over the next decade and a half.
In developing the content for the consumers section, Schneider identified three key consumer trends that will transform retail supply chains:
1. Changing demographics. As the economic influence of the Silent Generation, Baby Boomers and Generation X diminish, much of the mainstream media’s attention has been focused on the purchasing patterns of Millennials. But Schneider says it’s the generation of consumers behind Millennials—the iGen (born after 2000)—who will have the most transformative impact on supply chain.
“iGen consumers grew up with computer and Internet access. It’s second nature to them to turn to technology to comparison shop and determine if a seller is trustworthy—whether that’s a retailer, brand or a highly-reviewed third party with excellent, peer-regulated feedback,” he says. “The spate of brick-and-mortar retail closures has eroded that trust, and iGen’s comfort with them. They’ll be totally comfortable making all kinds of purchases online.
2. Convergence of business-to-consumer (B2C) and business-to-business (B2B) buying habits. Procurement departments, purchasing agents and face-to-face pricing negotiations with sales people are rapidly disappearing, says Schneider. Businesses buy supplies with an end user mentality.
“With mobile devices and corporate credit cards, any employee can now buy whatever their operation or workplace needs—and its not just office consumables like paper and pens,” he notes. “Computers, printers, hardware, casters, pallet rack, cameras, software, cleaning supplies—the phone or the mobile device has become the purchasing department. It’s not uncommon these days for an operations manager to solve an immediate need by connecting via tablet to the Internet and placing an order while standing on the plant floor.”
3. Personalized logistics expectations. Far beyond the concept of mass customization, Schneider says that with the advent of mobile devices, consumers are going to want personalized delivery—and they’ll be willing to pay for it.
“Consumers will be more likely to make a purchasing decision based on the ability to select options that decrease their effort and time in buying and receiving product—rather than basing their decision on who has the item at the lowest price,” he says. “They used to think about cost first, now they think about ‘can you deliver my item to me wherever I happen to be at a given time.’ Think of it as ‘delivery to phone.’ And that’s utterly disruptive to traditional materials handling and logistics operations.”
Discover more about these three big consumer trends and their ultimate supply chain impacts in Roadmap 2.0, starting on page 28. Download the free Roadmap 2.0 report here.