Blue Yonder, a leading digital supply chain and omni-channel commerce fulfillment provider, today released its Q4 2022 Company Highlights and perspective on the commerce and logistics trends that matter most heading into Q1 2023.
On the heels of the National Retail Federation’s Retail’s Big Show, Blue Yonder gleaned the following insights from meeting with retailers and partners at the show:
- The Shopping Experience Must Be Seamless: “Omni-channel” and “order management” have given way to “commerce”: the complete shopping experience. Availability and visibility, and how that insight can drive workflow orchestration, remain important for retailers as customers continue to shop in fluid ways, while intelligent fulfillment is critical in a supply-constrained market with rapidly changing demand.
- AI-Powered Supply Chains Gain Momentum. Artificial intelligence is critical in planning and optimization solutions, and can help retailers improve business efficiencies across the entire supply chain with automated business processes spanning demand forecasting, to warehouse robotics.
- Automation and Optimization Are Driving Operations: The retail industry is moving toward higher levels of automation through tasking, labor management, and micro-fulfillment.
Other trends we predict we will see in 2023 include:
- Stores and Frontline Workers Will Continue To Be Key to Success. As shoppers return to stores, in-store merchandising and product availability are equally as important as how best to service buy-online-pickup-in-store (BOPIS) and store fulfillment. These demands have made the frontline worker even more important to retailers, so companies need to look at: automation to pick up the mundane tasks, which allows employees to focus on the customer; making the workplace digital for the next-gen worker; and refreshing infrastructure to support the stores and the customer experience.
- Logistics Will Be Focused on Stabilizing the Supply Chain. Distribution centers, warehouses and, in some cases, transportation will be over capacity in many areas at the start of 2023. Companies who invested in adding capacity during the COVID-19 pandemic will be glad they did to help support long-term plans while others may find it hard to survive the drop in demand and sales, which will make it difficult to pay for the capacity they built. While transportation capacity can be flexed to a certain extent, it is harder to do so with warehouses since real estate is fixed and typically has five- to 10-year leases. Transportation capacity may also be put the test as more retailers stop chartering entire ships and instead use common cargo vessels.
- Retailers Will Lean on Technology To Boost Brand Loyalty. Shopper expectations are at an all-time high, and customers will sacrifice brand loyalty for an optimal shopping experience. In December, Blue Yonder, in collaboration with Incisiv and Microsoft, released the 2023 Omnichannel Experience Index which found that 45% of online shoppers defect for better deals, and 56% of shoppers will abandon their carts due to concerns about delivery time. To keep shoppers returning to their storefronts and websites and to exceed customer expectations, retailers will lean on commerce technologies to provide transparency into real-time inventory status and delivery timelines.
“Supply chains are at the intersection of new secular trends that are increasing uncertainty and a set of new revolutionary technologies. As a result, we have seen investing in supply chain projects come to the top of the priority list. Customers are leveraging our AI-powered solutions to reduce costs, manage labor shortages, and rewire global manufacturing and trading routes,” said Duncan Angove, CEO, Blue Yonder.
