With multiple points of friction and massive costs at stake, the supply chain feels like such an obvious area for disruption… and yet, we have yet to see any fundamental mass-adoption game changers hit the supply chain.
Let’s take a look at what people were talking about last year:
There was lots of interest in innovative fulfilment, culminating in December when Amazon made its first drone delivery to a customer just 13 minutes after the order was placed… Apparently they have plans to extend the trial to “dozens of customers” in 2017 (forgive me for feeling underwhelmed).
Potentially more exciting however, was the news that Amazon had patented airborne fulfilment centres that would launch drones to deliver merchandise from above. Sound pie in the sky to you? (pun totally intended). This game-changing idea may not be as crazy as it initially sounds. Let’s be honest, if anyone can do it, Amazon can.
Then there’s been talk of smart contracts enabled by blockchain tech in supply chain. I personally would welcome the ability to categorically know that my beef was indeed beef, or that my T-shirt was manufactured in a factory which observed ethical working practices and fair wages. We’ve yet to see any significant uptake on this, but I think this trend is one to watch.
And of course I cannot ignore 3D printing. Such a fascinating and potentially ground breaking concept – truly opening up the possibility of collapsing entire supply chains. While the tech to achieve this is still a way off, companies such as Carbon3D are creating really exciting waves in this area.
So, let’s take a look at 2017 and what could feasibly happen this year:
The immediate opportunity is around optimising inventory: moving away from a world where we think we know what customers want to an environment where we actually know what they want. Sounds utopian? Let’s look at some practical ways this could be achieved:
Over 60% of new consumer products fail so let’s try to remove some of the guesswork around “will they like it?” to involve the customer in the very first decisions around design. Tech companies like Claire enable you to digitally share CAD designs and early samples with your customers to gauge reactions and inform which lines to progress to the production line. Not only does this help to streamline the merchandising process, but consider the valuable accompanying customer insights. I can foresee a future where the value is increasingly moving away from the product itself and towards the data that shadows it.
Moving down the supply chain
There is some great tech out there today which can help retailers and customers move on from the question of “will it fit?” to “tell me your size”. Shoes are a clear use-case for this – tech companies like Sols and Elementum can remove the moment of “will it fit” doubt in the purchasing journey, tackling both conversion and returns challenges. Did you know that high heels are a $40 billion dollar industry by themselves? Neither did I. Imagine the savings you could achieve in high-heels alone when you consider that 30% of shoes bought online today are returned.
For eTailers or those with a limited bricks and mortar footprint, there are some simple and practical options out there. Bonobos is a great example of this with their Guideshop locations (essentially showrooms with knowledgeable fitting guides). These enable you to try on the clothes, find the right fit and walk out hands-free, whilst your guide processes your online order for it to be shipped to your destination of choice for free.
Over 60% of new consumer products fail so let’s try to remove some of the guesswork around “will they like it?”
I’m not placing my bets on 2017 being the year of supply chain disruption… but the retailers who focus on progressing their lean supply chain initiatives and who achieve better levels of inventory optimisation will be those who gain the competitive edge this year.
And wouldn’t it be awesome to be proved wrong and be writing to you this time next year about how my Christmas shopping had been delivered via drone from my local airborne fulfilment centre… watch this space.
A condensed version of this article was originally published by Retail Week.