This insight was shared by experts at an online event hosted by Supply Chain Dive and Retail Dive on 28/1.
During the event, Rupal Deshmukh, a partner in strategic operations at global management consulting firm Kearney, stated that speed and convenience remain critical factors for online shoppers.
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Speakers discuss how online shopping trends impact holiday shipping season. Photo: Supply Chain Dive |
Additionally, artificial intelligence service providers like OpenAI, the developer of ChatGPT, are changing consumer behavior by making last-minute purchasing decisions more prevalent. For instance, ChatGPT might suggest solutions to a user's problem, such as controlling gnats in potted plants, leading to an immediate product purchase.
"From a supply chain perspective, this means businesses need to bring every adjustment in their distribution systems as close to the customer as possible," Deshmukh said. She also recommended that companies integrate AI-driven shopping into demand forecasting models to position inventory most effectively.
Rick Jordon, a senior managing director at FTI Consulting, observed that transportation costs, excluding the last mile, have been relatively low over the past two years. This facilitated cost-effective regional inventory placement.
"We have seen adjustments to this strategy, but even a slight increase in transportation costs will revert the trend to pushing goods forward more, rather than concentrating them regionally," Jordon noted.
As inventory strategies evolve, many businesses focus on reducing overall supply chain costs through distribution center automation. Deshmukh cited Walmart, where more than 60% of US stores receive some goods from automated fulfillment centers, according to the retailer's report.
Overall, Deshmukh concluded that supply chain strategies must account for consumer preferences for speed and convenience.
"Supply chains cannot lag behind changes in consumer behavior, especially in the current climate," she emphasized.
By Anh Duong (Source: Supply Chain Dive)
