In 2020, supply chains transformed faster than ever. As brands face 2021’s challenges, these 5 supply chain trends will be key to success.
By Steve Norris
#1: Supply Chain as a Service Models will Expand
Today’s organizations need to become more agile and adaptable. As supply chain teams have shrunken in the last year, we’re starting to see organizations take a closer look at their operations. To aid smaller teams, or take the burden off their crews, many of these businesses are seeking institutions that have expertise in specific supply chain areas, to help them scale. In fact, research by Deloitte found that 76% of manufacturing executives planned to invest more in digital initiatives this year.
By outsourcing and automating key supply chains processes, businesses can save time and internal resources, while expanding their connectivity and commerce footprint. Here are a few ways we’ll see that in our 2021 supply chain trends.
- More 3PL partnerships. 3PLs provide a great opportunity to outsource logistics and inventory management, at a lower cost than adding internal headcount, infrastructure, and real estate.
- Outsourced manufacturing and co-manufacturing. Like 3PLs, these services are a great failsafe against closures; but they can also help increase capacity during demand surges.
- A shift towards multi-enterprise supply chain commerce networks. With lean teams and even smaller IT departments, many brands, distributors, and manufacturers are seeking single-vendor, automated supply chain solutions that come with fully managed services and support that reduce their in-house burdens.
#2: Manufacturers Are Rethinking Their Workforce
According to recent research, 80% of manufacturers are expecting to have multinational operations by the end of 2021. As they expand, organizations are starting to rethink their workforce. There’s been a shift to seeking knowledge workers, instead of traditional data entry clerks. We’re seeing organizations bring to the table more workers with analytics, procurement, and IT skills—technical experts. Many of these are tasked with leading supply chain digital transformations, which brands now realize are critical to managing multinational supply chains.
That’s not to say that domestic manufacturers are keeping the status quo. A survey from Industry Week showed that increasing labor productivity, and finding the right talent were top priorities for VP’s and managers in manufacturing. At the same time, brands are looking to technology to take over basic workflows, so team members can refocus on higher priority projects. For example, by switching to an integrated Pack & Ship solution, TrueCommerce customer, AndWest, reportedly saved 4,000 hours of work. At the same time, The Little Potato Company was able to grow their business 20%, while reducing workloads across IT and Accounts Receivable, thanks to integrated EDI.
#3: Omnichannel is the New Normal
Analysts and organizations alike have been talking about omnichannel for the last decade, so much so that you might be tired of hearing about it. But based on what we’ve seen, omnichannel sales and operations are here to stay in 2021, making it another impactful supply chain trend. The ability to let customers buy online and pick up curbside or in store (BOPIS), return online orders in store, get direct delivery, or shop however is most convenient for them has been a driving force in the market for a while. 2020 just showed us that the market is already there; not only did eCommerce buying soar 42% YoY in August, but BOPIS sales, which represent a truly multichannel experience, increased 259%.
“Consumers have been very vocal about wanting low- and no-touch options such as BOPIS and curbside, as much for the convenience they provide as for health safety concerns. Retail has evolved to be as much about how you sell as what you sell,” said Jordan K. Speer, Research Manager, Global Supply Chain, IDC Retail Insights. “Omnichannel isn’t new, but its steep acceleration in 2020 has demanded more attention and focus on improving the customer experience in areas of ecommerce, personalization, and product fulfillment,” she says.
Retail giants are leading the way by expanding from their brick-and-mortar stores to online platforms like Walmart.com, and Target+. As they do, we’re seeing more and more vendors adding marketplace integrations to their existing traditional retail partnerships. In 2021, we expect this trend to continue, with retailers and suppliers alike seeking to get a piece of the omnichannel pie.
To us, it’s clear: a multichannel presence isn’t a nice to have anymore—it’s table stakes in 2021. Speer says that’s absolutely true, and that results from IDC’s recent Retail Consumer Insights Survey show that a majority or close to a majority of consumers are likely or very likely to go elsewhere if they are not offered options of BOPIS, curbside delivery, same-day delivery, and visibility into fulfillment options and costs before they make a purchase.
#4: Marketplaces Are a Key Focal Point
In 2020 people stuck at home began to “optimize” their homes, and their new work-from-home spaces in particular. To get that done while staying safe, many turned to online sellers—specifically eCommerce marketplaces like Amazon, eBay, and Wayfair. These platforms let customers buy different products from different brands in a single order—a major plus for convenience. No wonder merchants selling on Amazon saw a 60% year-over-year increase in sales during 2020’s Black Friday and Cyber Monday Sales.
Where consumers go, retailers follow, and as they do, manufacturers and brands start moving as well. This has caused a surge in drop shipping, as retailers seek to offer more brands to their customers, and manufacturers take advantage of existing digital footprints.
“As consumer behavior continues to evolve and the eCommerce landscape changes, more brands are shifting their efforts online, trying to optimize their digital presence and adapting to a changing retail world,” said Derek Conlin, Senior Director, Global Business Development and Corporate Development, ChannelAdvisor. “In order to stay competitive, it’s more important than ever for brands and retailers to be able to reach more customers through diversified channels and understand the marketplace landscape and which platforms make most sense for their business objectives.”
In 2021, we expect to see a continued boom in marketplace shopping, and with it, an increase in both retailers starting their own marketplaces, and manufacturers either expanding or getting started with drop shipping. Along with it, we anticipate more brands investing in shipping solutions designed to manage logistics costs, increase sustainability, and provide better delivery accuracy.
#5 B2B eCommerce Will Take Center Stage
A lot of brands spent 2020 trying to figure out how to optimize the consumer shopping experience online. With shutdowns and supply chain disruptions that negatively impacted traditional channels like retail stores, it was crucial to have new sales channels in order to survive. The brands who excelled at eCommerce saw success despite the difficulties, like Hazlitt 1852 Vineyards, who managed a sales surge of 1600% in three weeks by leveraging eCommerce automation.
But B2C organizations haven’t been the only ones learning a thing or two about eCommerce. The same folks ordering from Amazon for their houses also needed to be able to order for their business with the same kind of ease. To capture this online demand, sellers have needed to take advantage of the changes in B2B eCommerce platforms that provide enhanced functionality, and a B2C-like experience.
Some businesses already had this in mind, opting for an eCommerce platform that supported both B2B and B2C eCommerce sales from a single storefront. Others are just now catching up, realizing the need for multiple eCommerce functions. In 2021, we predict this supply chain trend will continue to take center stage, driving more and more brands to offer an ideal customer buying experience online for both consumers and business decision makers.
Are You Ready for 2021’s Supply Chain Trends?
One trend held true in 2020: the companies that invested in technology came out on top. To stay ahead in 2021, brands need to take advantage of innovative supply chain solutions that increase agility and visibility, enable omnichannel management and reduce workforce burdens, and can take their eCommerce efforts to the next level.
About the Author:
Steve Norris is the VP of Pre-Sales Engineering, Supply Chain Collaboration, at TrueCommerce. He is responsible for helping engineer solutions that allow small to enterprise businesses more efficiently and effectively collaborate with their supply chain partners and expand their sales channels. With over 15 years of supply chain experience ranging from consulting to sales, Steve helps organizations looking to achieve growth and profitability through providing solutions that allow seamless connectivity to customers, suppliers, channels, and systems.