How an Agile Supply Chain Supports E-Commerce Growth
A recent study by Capgemini estimated that 77% of consumer products organizations don’t believe their supply chain is agile enough to support evolving business needs, and most of them are probably right. Unless agility has been built in, most supply chains haven’t been designed to meet the evolving needs of consumers, especially when it comes to e-commerce fulfillment.
What do we mean by an agile supply chain?
Agile supply chains respond rapidly to meet consumer buying patterns in volatile marketplace environments. In practice, this can be further broken down into several pieces:
Meeting demand spikes — responding to unstable buying patterns by shifting inventory to meet demand.
Adding new consumer channels — quickly meeting growth on new marketplaces and platforms without new investments in infrastructure or agencies.
Testing and learning — adapting strategies to test new channels and geographies.
Agile fulfillment unlocks growth
Agile strategies unlock growth opportunities by enabling brands to operate over more platforms, more marketplaces, and more geographies. One of the best aspects of an agile approach is that it removes the need to question whether or not a market is viable. Instead of waiting for an answer on market viability, an agile approach decides it through testing, learning, and adaptation.
Agility is really about data
Fulfilling to new consumers and new geographies brings in new and valuable transaction data, which can then inform different areas of an integrated retail strategy — marketing, product development, and so on.
A detailed view of customers could help marketers realize inefficiencies with their tactics. For example, repeat purchase behavior that may have been previously undetected can mask your loyal customers and lead to inefficient customer acquisition costs.
Insights from transactional data can also provide a more nuanced differentiation between channel customers. A "thirty thousand foot view" using third-party data makes digital consumers across platforms look more similar than they are. Using transaction data to understand those differences can inform effective actions including merchandising (assortment, kitting, bundling), loyalty (inserts, engagement), customer experience (packaging, traceable scan codes).
These are just a few examples of how transaction data combined with actions is a powerful combination when enabled by agile strategies.
How we’ve combined data and actions into agile fulfillment strategies
Two of the biggest challenges in e-commerce logistics are demand forecasting and inventory planning. Out of stocks are a constant threat that result in missed opportunities and lost customers. This was especially true when COVID-19 first hit the US in March of 2020. Consumer buying patterns became extremely volatile, spiking in some categories and plummeting in others.
The Vitamins, Minerals, and Supplements (VMS) was one of the categories that experienced unprecedented demand and thinly stretched online inventory levels. Demand brought by COVID was different than a naturally occurring surge because there was virtually zero time to prepare. Distribution and manufacturing had to be rapidly coordinated to get inventory where demand was highest. Our team did this using agile methodologies and actualized sales trends, which ensured that our VMS brand partners maintained healthy inventory levels despite demand volatility.
A final argument for agility
An agile supply chain positions brands to reach customers regardless of geography, platform, or marketplace. Business needs have become a moving target. Consumer behavior and economic conditions change daily, and an agile approach is what brands need to meet demand as it arises.
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Contact us to learn how Netrush has helped brands grow through agile fulfillment
