The Evolution of Demand: Navigating the ‘New Customer’ in the Supply Chain Landscape

The digital transformation sweeping across all supply chains is not triggered by new technology but by the emergence of new customer behaviors and expectations. This “New Customer” represents a dramatic shift in the marketplace. Today’s customers are more informed, connected, and driven by their values, demanding transparency, sustainability, and personalized experiences from businesses.

The influence of the New Customer is significant, with their preferences and values having the power to redirect supply chain priorities. For instance, the farm-to-table movement has changed not only how people dine but also how food suppliers manage their supply chains. Restaurants and food retailers now need to provide detailed information about the origin and journey of their ingredients, meeting the expectations of the New Customer for authenticity and transparency.

Similarly, this shift can be seen in the fashion industry in how a leading clothing brand has responded to the demand for ethical production. The brand overhauled its supply chain to ensure fair labor practices and reduce its environmental footprint. This change allowed the brand to offer consumers visibility into the production process, from sustainable material sourcing to the final product, catering to customer desire to make value-driven purchases.

These examples underscore the transformation that’s sweeping across supply chains in all sectors. Insights from surveys conducted by the Digital Supply Chain Institute (DSCI) in 2022 and 2023 reveal a significant transformation in consumer behavior, prompting the evolution of supply chains from linear models to dynamic, responsive demand chains.

In the 2022 DSCI survey, 44% of customers preferred online shopping. By 2023, this number jumped to 58%, signaling the urgency for a digital-first approach in supply chains. These consumers are not just reshaping retail; they are redefining how supply chains must operate in a digitally interconnected world.

The pivotal role of the New Customer

The New Customer’s role in supply chain transformation is pivotal. They are not passive consumers but active participants who demand a stake in the supply chain narrative. Their insistence on transparency, ethical sourcing, and personalization is turning the traditional supply chain into a complex network of demand chains that must be agile, transparent, and customer focused.

The demand for transparency has seen a remarkable rise, with the importance attributed to knowing a product’s origin and ethical credentials jumping from 18% to 43% between 2022 and 2023. This calls for an overhaul of supply chain visibility, necessitating investments in technologies like blockchain that enable traceability and foster trust.

The surveys also indicate that personalization is rapidly becoming a non-negotiable aspect of the customer experience. A steep increase from 39% to 58% in the demand for personalized experiences between 2022 and 2023 underscores the need for supply chains to deploy advanced analytics and AI to tailor the customer journey.

This shift is not a temporary response to a global pandemic but a permanent evolution in consumer behavior. For supply chain leaders, this means integrating e-commerce into every facet of the supply chain, ensuring that logistics, inventory management, and customer service are aligned with an online-first retail strategy.

Strategies for supply chain leaders

The insights from the DSCI surveys translate into actionable strategies for supply chain leaders:

• Digital transformation: Invest in digital infrastructure that supports e-commerce, including user-friendly platforms, integrated logistics, and advanced analytics for real-time decision-making.

• Visibility and transparency: Employ technologies like IoT and blockchain to provide end-to-end visibility and traceability from the source to the customer.

• Sustainable practices: Redesign supply chain operations to minimize environmental impact, including sustainable sourcing, reducing waste, and optimizing logistics for energy efficiency.

• Customer-centric personalization: Utilize data analytics to understand customer preferences and craft personalized experiences that resonate with the New Customer’s desires.

• Agile response to market trends: Foster an organizational culture that quickly responds to market trends and customer feedback, ensuring that the supply chain is as dynamic as the market it serves.

• Ethical sourcing: Partner with suppliers who adhere to ethical practices, ensuring that the supply chain is efficient and morally sound.

• Educating the customer: Actively engage with customers to educate them about your efforts to meet their expectations, thereby building a relationship based on trust and transparency.

It is evident that the New Customer is not a passing phase but a permanent fixture in the supply chain ecosystem. The DSCI surveys offer a treasure trove of insights that, if heeded, can lead to a transformative era for supply chains—an era where efficiency, sustainability, and customer-centricity are not competing priorities but facets of a singular, all-inclusive strategy.

The message for supply chain leaders is clear: adapt to the expectations of the New Customer or risk falling behind. By embracing these evolving demands, supply chains can not only drive customer satisfaction but also carve out a competitive edge in the rapidly changing global economy. The future of supply chain is being rewritten by the New Customer. Those who listen, adapt, and evolve will lead the way in the new demand-driven marketplace.

About the Author:

Vivek Ghelani is director of research for the Digital Supply Chain Institute, a member-let research organization focused on the evolution of enterprise supply chains in the digital economy.

SC
MR