Supply Chain Commerce & the Green Imperative

WRITTEN BY RAGHAV SIBAL, MANAGING DIRECTOR, MANHATTAN ASSOCIATES

The pandemic exposed the fragility of many supply chain networks and their inability to sense and dynamically adjust to shifting demands and consumer preferences, labour requirements, and transportation, causing havoc to economies and brands worldwide.

However, what has been a saving grace during this time is technology. Investments in technology and automation in distribution centres are now at the forefront of most Chief Supply Chain Officers’ agendas. In fact, Gartner recently upped its supply chain management technology forecast from 8% to 14% in compounded annual growth – forecasting a $28 billion investment by 2025.

The retail sector is one of the many industries investing in and adopting new technologies to stay afloat. Retail is racing to transform its store, digital, fulfilment and customer service experiences to win over omnichannel consumers, boost employee productivity and increase profitability, all while trying to balance increasing environmental requirements.

Retail’s digital transformation

Digital transformation initiatives have kicked into high gear across retail supply chains, allowing brands to reap the benefits of cloud-based, composable IT architecture, microservices and AI in efforts to match supply with demand better, and sharpen customer expectations.

While it’s clear the retail sector is experiencing a lot of change, at the end of the day, the way revenue is generated has always been the same –

Keep your store shelves stocked, online orders shipped, and customers happy.

The difference between today’s retail landscape and that of the past is that in 2022 there is exponentially more choice. With more and more choices of products, purchase options, fulfilment options, delivery options, and payment options, consumers control the buying journey, making it much more complicated for the brands serving them to meet their expectations.

If the complexity of consumer expectations isn’t enough, many brands are still struggling to mitigate the effects of the pandemic, which include severe labour shortages in warehouses, shipping docks, truck depots, and in stores with retail associates.

Supply chain commerce

Aside from issues around labour shortages, one significant and unforeseen effect of the pandemic tailgating retailers more than anything else is the pressure to improve sustainable and green credentials. Primarily driven by Gen Z consumers, rising expectations for sustainable retail call for a restructuring of the retail supply chain – something that the initiation of supply chain commerce aims to address.

‘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, that means re-engineering physical and digital supply chains to connect them and bring them in step with consumer and societal expectations of greater responsibility – both today and tomorrow.

consumers are 38 per cent more likely to have shopped online in the last three months than in-store.

Time is 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 into 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 eCommerce and physical stores independently. 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 and, crucially, from an environmental perspective too.

A retail sector for the future

The shift in spending power toward Gen Z is a massive development. While generational changes are a regular occurrence, maybe no shift is (or will be) more seismic than the rise of this ‘Zoomer’ group.

According to a recent article in Vogue, Gen Z

This awareness of societal trends is also leading to some key generational spending markers. 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 globalisation, capitalism and consumerism. Yet those issues are often cited as primary causes of the current climate emergency. 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.

Technology to serve this social demand for sustainability

The right technology can empower and enable companies to offer their consumers more informed and greener options at every stage of the purchasing process.

It’s at work from the moment a person clicks on a buy-now button, to a more efficient packing process that reduces shipping volume, to optimised transportation routing that reduces travel kilometres, 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 commerce and fulfilment, makes it possible. That allows consumers and brands to make last-minute order changes or combine shipments right up until items leave the warehouse, store, dark site or micro fulfilment centre. Supply chain commerce gives the end-consumer tools to make greener, more sustainable purchasing decisions, and brands that do so will likely be rewarded with greater loyalty and repeat business. ●

For more information visit: manh.com/en-au