Published Tuesday 19th November 2019
The B2C relationship is transforming at a rapid rate. Over the last decade, advancements in technology have completely changed purchasing behaviours, with products expected with a convenience and punctuality that has never been matched. As a result, many businesses are now having to reevaluate their value proposition with regards to the modern consumer.
Whilst many businesses are successfully adjusting their services for the modern world, one area that consistently struggles to adapt is delivery. In an ultra-competitive landscape, these fine margins can be where customers are won and lost. Here, we take a look at some of the key changes in consumer demand over the last few years, and why businesses must build a supply chain that can accommodate these needs.
Looking Beyond Price
When people analyse the impact of the rise of e-commerce over the last few years, the first thing considered is often price points. The increased competition and reduced overheads of online shopping have indeed forced all businesses to squeeze their profit margins. However, the impact of online shopping can be felt much further across the business landscape, and its effects are arguably stronger elsewhere.
Widely referred to as the Amazon Effect, the rise of e-commerce giants has also ushered in a new era of high-speed retail. The old belief that bricks-and-mortar retail could beat e-commerce for convenience is continually shrinking, as more online companies look to offer same-day delivery to the modern consumer. The turnaround expected from customers is now so fast that many logistics strategies are beginning to show signs of inefficiency. Last-mile delivery systems are one instance where companies are trying to adjust their delivery techniques to satisfy modern demands. However, an increasing number of half-capacity HGVs nationwide, 86% under three-quarters according to research by Renault Trucks UK & Ireland, shows that there is still work to be done across the supply chain.
Peak Days – Strain Versus Opportunity
Throughout retail history, there have regularly been rises and declines in demand depending on the time of year. Retailers have always planned for Christmas and, more recently, phenomenons like Black Friday have also reached the mainstream. However, as online continues to grow, more peak days are being created. In 2018, Amazon’s Prime Day event produced revenues of $4.2bn, a growth of 33% on the year before. Without releasing figures, Amazon claimed that they sold more during the 2019 event than they did in the past Black Friday and Cyber Monday combined.
Events like these are an excellent way for companies to galvanise an already loyal customer base into purchasing actions. However, such an uptake in orders puts enormous pressure on delivery systems across a short timeframe. With convenience playing such a key role in modern purchasing decisions, customers that are not satisfied are more likely than ever to take their business to a competitor.
Customer-Centred Future Supply Chains
The pressure of peak days and the desire for convenience in modern B2C means an evolution of logistics techniques is necessary to reach supply chain optimisation. Delivery systems need a customer-focused approach that is flexible to the needs of individuals. The only way to achieve modern customer satisfaction is by utilising new technology.
Advancements in artificial technology, in particular, have opened up new possibilities for distribution, allowing businesses to work proactively to solve demand issues before they occur. Real-time decision making using the Internet of Things presents further efficiency possibilities, whilst blockchain could transform security and accountability across the supply chain. Active uptake of these new technologies will allow all major businesses to deliver to modern consumer standards whilst maintaining an efficient and sustainable process.
Here at Expense Reduction Analysts, we’ve been working with major retailers across the UK, helping to reduce distribution costs. Our specialist teams have saved millions of pounds in a range of cost areas, including UK freight and international parcel distribution. If you’re interested in seeing what our team could do for you, why not get in contact with us? Alternatively, discover our case studies, showcasing our work across the industry.