CSCMP's Supply Chain Quarterly
October 16, 2018

What shoppers want ... and what it means for you

How consumers shop and buy is driving change in supply chains at a dizzying pace.

When the holiday shopping season begins, the lines will likely be shorter than last year's, and they will probably shrink further in the future. The mass migration of shoppers from traditional brick-and-mortar stores to digital storefronts is well under way and continues to gather steam.

The latest evidence of this comes from an annual study released earlier this year by UPS. The fifth annual "Pulse of the Online Shopper" study shows that avid online shoppers, defined as those who make two or more online purchases in a typical three-month span, are now making more than half of all their purchases online.

This is the first time in the study's five-year history that more than half (51 percent) of all purchases by respondents are made online. The study also suggests that the shift from in-store shopping to e-commerce will continue. Nearly one in five respondents indicated that they plan to do more shopping online in 2017 than they did in 2016.

Traditional stores aren't all they are migrating away from. They are also moving away from their computers as their primary shopping tool and instead turning to their ever-present smartphones. A full 77 percent now conduct their online shopping primarily on mobile devices, up from two-thirds in 2014.

Physical retail stores, though, still have a place in the new omnichannel world; 45 percent of online shoppers said they still go to physical stores. Some traditional online retailers are even establishing a brick-and-mortar presence, albeit with a twist: they're experimenting with showrooms that give consumers the opportunity to examine products before buying them online.

Just as today's customers expect to shop via any channel they choose, they also expect to use more than one channel to execute a single transaction. For instance, the study showed that about half the buyers who shop and buy online want to pick up their orders at a store. These "cross-channel transactions" now account for 38 percent of all purchases.

To meet all of these expectations, retailers must have visibility into available inventory in both the store and at the supporting DC(s). Retailers also must create a seamless experience between their virtual and physical storefronts that reflects how their customers want to shop.

Our report on omnichannel distribution in this issue provides insight into how retailers and their service providers are responding to these rapidly changing demands. The report features the results of a joint survey we conducted with ARC Advisory Group in which we asked respondents what processes and technologies they used to fill the various types of orders. As it turned out, their answers were all over the map. Just as there is no one buying pattern common to the majority of shoppers, there is no one solution for satisfying these shoppers. Supply chain professionals will continue to face challenges as the complexities grow and the variables multiply. Their fortunes will depend on their ability to remain agile and responsive, and on their willingness to adapt to consumer demands that seem to change by the day.

Mitch Mac Donald is Group Editorial Director of AGiLE Business Media.

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