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consumer

The Unique Needs of the Consumer Goods Sector

Almost everything we touch or consume or use in society is a consumer good. Bicycles, refrigerators, jewelry, clothing, etc. Consumer goods are products bought for and used by consumers, rather than by manufacturers for making other goods. The sale of consumer items is big business. Consumer spending represents 69 percent of the U.S. economy. Two-thirds of that figure is on services (such as housing and healthcare). However, a full one-quarter is spent on non-durable goods like clothing and groceries with the remaining portion on durable goods, like cars and appliances.  

The National Retail Federation estimates retail industry sales will grow between 3.8 and 4.4 percent this year, buoyed by economic growth. 

Deloitte’s 2018 Consumer Products Industry Outlook Report reports that “the US economy is likely to continue to grow at a moderate 2.0–2.5 percent rate into 2018. A key source of strength is consumers, who have benefitted from a strong labor market and rising incomes. Unemployment is at a record low of 4.2 percent, with an average of about 148,000 jobs added every month. Real disposable personal income is up, albeit slowly, by 1.8 percent in 2017, and is likely to pick up momentum next year, rising by more than 2.0 percent.” 

Unique Challenges of the Consumer Good Sector 

The transport of consumer goods presents unique logistical challenges. Non-durables must be transported quickly – and frequently. Fast-moving consumer goods (perishables, trendy items, items linked to promotions and product rollouts) are subject to certain operational constraints – some of which are controllable and some of which are not (highly variable outbound logistics).  

Customers control the choices and the buying process.

Durables, along with non-durables, are affected by the extra pressures of the “New Customer”  – a customer that is more aware, more demanding and who holds higher expectations than we have ever seen before. These expectations relate to the availability of products (on the shelf, i.e., no out of stocks) and timely, free, traceable delivery (for home shipment). Customers control the choices and the buying process.

A well-developed digital presence across platforms and channels – consumer-centric, smart-phone focused –  is what will drive future sales.  

Shopping patterns and distribution networks are changing. Some customers go to bricks and mortars stores to do their consumer research, then order online from the same store or rival. Others make their purchase in-store after engaging in online comparison shipping. In-store purchasing remains strong, but there is more choice for the consumer. A twofold presence for retailers (in-store and online) is becoming mandatory. A new trend is for stores to partially function as fulfillment centers for online orders. A well-developed digital presence across platforms and channels – consumer-centric, smart-phone focused –  is what will drive future sales.  

Where 3PLs Come In 

Many larger consumer goods firms have historically relied upon in-house logistics. Now they are turning to third party-logistics providers (3PLs) in droves, joining the ranks of smaller brands of consumer goods that do not have the same in-house distribution capabilities and are more familiar with outsourced relationships. Ninety percent of Fortune 500 companies operating in the US sought out help from a third party logistics provider in 2017 (up from 46% in 2001). 

Because 3PLs are nimble, they are able to juggle the B2C needs of the new world of consumer goods logistics well. They are uniquely suited to help firms cope with the rising costs of freight.

Unique advantages of 3PLS in the field include: 

  1. Consolidation – combining loads from closely located suppliers to keep logistics costs down.
  2. A network of resources – such as warehousing spaces and flexible transportation fleets. 
  3. Economies of scale – derived from an increase in handled items (leading to better productivity). 
  4. Technology – a robust proprietary software that can integrate complex supply chain ecosystems in a manner comparable to a leading enterprise.

BlueGrace uses proprietary technology to enable you to proactively identify opportunities to alleviate costs and optimize your supply chain. Fill out the form below or call us today to see how we can help simplify your distribution needs! 

Why e-Commerce is now “Talking Shop”

Retail has undergone a radical evolution over the past few decades. When Amazon first appeared online, it was little more than an online bookstore which then piggy-backed toys for now extinct Toys-R-Us.

As e-Commerce began to gain ground, sites like Amazon were a good place to shop for a wide assortment of things you might need around your house. As the e-Commerce disruption to the brick and mortar store continued, you could launch Amazon from your phone, to shop or compare prices on the go. Now, e-Commerce goes a step further with voice-driven shopping, otherwise known as conversational commerce.

“The past year has been a decisive year for voice-driven Conversational Commerce – consumer purchase of products and services via voice assistants such as Google Assistant, Amazon’s Alexa and Apple’s Siri. While earlier restricted to chatbots accessed via messaging apps for shopping, the definition of Conversational Commerce has significantly expanded with the arrival of voice-based personal assistants, presenting brands with an opportunity to build greater intimacy with their customers,” according to an article from Capgemini.

The Growth of Conversational Commerce

Being able to shop from the comfort of your home on a computer or a smartphone is certainly a convenience. Being able to build a shopping list just by talking is even easier. That’s probably why Capgemini’s survey concluded that 40 percent of consumers would likely be using a voice shopping method over visiting a website or using an app within the next three years. Additionally, 31 percent will likely choose to use a voice assistant over physically visiting a shop or a bank branch.

When you consider the wide array of functionality, it makes sense that we’ll be seeing an uptick in voice assistant.

As the system is fairly intuitive, simply speaking what you want added to your shopping list. Given the ease of use, it’s no surprise that 51 percent of consumers are also voice assistant users for things such as purchasing. A voice assistant can also perform a wide array of other functions such as calling for a ride on Uber, making payments or sending money, or even ordering takeout for dinner. When you consider the wide array of functionality, it makes sense that we’ll be seeing an uptick in voice assistant.

A Personalized Customer Service

Typically, having to interact with a robot when you’re calling customer support can be an irritating process at the best of times. Interestingly enough, 1 in 3 respondents of the Capgemini survey said they’d be willing to replace customer support or in-store shop sales support with a personalized voice assistant to enhance their in-store shopping experience. While that might seem like a negative aspect for retail stores, it’s shown to actually increase brand loyalty as well as average spending by an additional 8 percent per order.

With this new wave of technology, retail stores are being presented with a truly unique means of increasing both their customer service and customer satisfaction. Companies that can create a dynamic and positive voice shopping assistant experience will be better able to serve their customers while increasing business at the same time. That’s not to say that human-based customer service will be completely phased out in the near future.

While a personalized voice assistant might be great for helping a customer look for specific items, they will perpetually fall short of the mark when empathy is required, specifically when things go wrong.

While a voice assistant is nice, it’s human empathy that can really make a person feel at ease when they have a problem. Many retailers are focusing on customer service as a means of increasing their business. This becomes increasingly important as many industries are turning towards automation to boost efficiency. While a personalized voice assistant might be great for helping a customer look for specific items, they will perpetually fall short of the mark when empathy is required, specifically when things go wrong.

This will certainly be something to keep an eye on as time and technology progress.

Logistics is a perfect example of this. When a shipper is having an issue trying to find a shipment, an automated call menu might be the last thing they want to hear. Having a human operator or customer service representative close at hand to help troubleshoot issues has always been vital, perhaps even more so now with the abundance of new technology. Because of this, retailers will have to learn to navigate the line between multi-platform digital solutions and good-old-fashioned human interaction. Voice assistants will be able to bring a lot to the table, connecting both companies to other companies and consumers to everything in new and exciting ways. This will certainly be something to keep an eye on as time and technology progress.

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