Exploring the Consumer-Driven Supply Chain

Technology, from smartphones to the Internet, is giving consumers an increasing amount of control over their e-commerce transactions. In addition to connecting traditional back-office activities with the consumer, this has also transformed what a winning supply chain strategy looks like. Instead of a product first approach, retailers need to put the consumer first.

Research from EfT points to this wholesale change in strategy. Three out of five respondents to the company’s survey define their supply chain as consumer driven. This shift has forged closer bonds between the marketing and sales functions. It has also made information technology decisions critical. New availability of data give organizations more visibility into consumer behavior than ever before.

Another shift is an increased demand for customization and personalization of product. Soon, this will be table stakes rather than a differentiator for most brands. With the emergence of the consumer driven supply chain, several challenges emerge.

“The biggest, as reported by respondents have been increased costs, smaller margins and increased lead-times,” EfT reported. “There is a clear correlation between consumer-driven and this decrease in resource and time efficiency. Essentially, consumers are shifting their shopping behavior.”

As consumer and customer centrism becomes the new norm, retailers need to innovate and invest to meet demand. Consumers expect retailers to foot the bill for differentiating innovations that support multichannel and multi-layered interactions. However, done well, it is a shift that benefits everyone. Automation reduces costs and increases efficiency, bolstering the customer experience. Increased data gives organziations a better handle on what customers want. “The result is, with the right systems in place, businesses can hand more power to consumers whilst creating efficiency, consumer satisfaction, cut costs and cut complexity,” the EfT report said.

The infographic below from EfT outlines some of the changes in the industry. Take a look at let us know how it matches up with what you are experiencing in the comments section below.

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