The rise of digital technology has arguably been the single most important change in the retail market. Consumers now have the option to shop on the go, order from the comfort of their own homes, and automate much of the shopping, ordering and delivery process. Amazon has already introduced 'Subscribe & Save' which offers consumers between a 5-15% discount if they opt for automatic reordering of a particular product. We partner with a significant number of clients in the Food & Drink industry, and many of them come to us because we offer Supply Chain management as one of our core services. So what does all this automation and digitisation mean for the future of supply chains?
Amazon Dash Button
The latest piece of tech to hit the market has been the Amazon Dash button. A handy "thumb-sized" button, connected to your Amazon account and a corresponding product, which you can place next to the product and press when you run out. This automatically reorders the product for you. Amazon has previously launched Dash in the USA and is now extending the market to the UK, Germany and Austria. Here in Britain, there will be an initial roll out of 40 branded buttons, like the US brand of washing powder Tide shown below.
Supply Chain Automation & Programmatic Commerce
This automation shows an increased focus on groceries across the industry, programmatic commerce; i.e. reordering of items with a smart device, is billed as the future of grocery shopping. However Amazon Dash seems a little bit like a drop in the ocean. If our fridges and cabinets are equipped with built in smart technology, how long will we continue to use individual buttons? The answer is, until we buy a new fridge! At the moment, most consumers in Britain have a non-smart fridge, but when it breaks- most of us will consider replacing it with a smart version. From the perspective of supply chain management, we need to be increasingly aware of the use of programmatic commerce. Consumers will start to expect automation as a standard part of their shopping experience, and we need to be ready to deal with the new challenges this will entail. Concerns over lack of control and security have already been raised, and the opportunity for little hands and paws to push buttons has already been dealt with by Amazon with its 'order protection' policy, but will still have lasting impact on consumer behaviour.
Companies that react to technological innovation will be the first to reap the advantages of sophisticated and engaged consumers, and we're already seeing a substantial take up within our own partnerships.