3 Ways Millennials Are Transforming Today’s Supply Chain

Millennials have now overtaken baby boomers as the largest segment of the American population, Pew Research Center data shows. As millennial purchasing power comes to dominate the market, consumer preferences and habits are changing, and supply chains must adapt to keep up with the demand. Raised on smartphones and accustomed to instant messages, this generation expects things to be available online, on demand and personalized. Here’s a look at three ways millennials are challenging traditional supply chain models, as well as what suppliers are doing to keep up with changing consumer demand.

Adapting Inventory to Omnichannel Shopping

Millennials are forcing inventory management to adapt to the demands of omnichannel shopping. In 2016, millennials made 54 percent of their non-grocery purchases online, a 3 percent increase from 2015, UPS research says. In addition to buying items online, they are also using their smartphones to webroom, meaning researching items and prices online and then purchasing in-store. According to the International Council of Shopping Centers, 46 percent of consumers aged 18 to 26 engaged in this practice throughout last year, a number rising to 95 percent among 18- to 34-year-olds during the holiday season. Meanwhile, 32 percent of consumers in this demographic showroomed, which is researching items in their local store and then buying them online.

One of the main reasons millennials webroom is to check available inventory before deciding where to make a purchase. This means that in order to maximize sales to millennial consumers, supply chain managers need to coordinate their inventory levels with their marketing and IT teams in order to make inventory information available on consumer-facing websites. This becomes especially vital during the holiday season when webrooming activity peaks. Similarly, displaying inventory levels online can also appeal to showrooming shoppers who might be inclined to buy now if they see items are available in stock. Amazon is a good example of a retailer that provides online shoppers with the ability to check inventory levels and estimated shipping times online before making a purchase.

Keeping Up With On-Demand Supply Needs

The super-fast shipping options Amazon offers has reinforced millennials’ expectations for instant on-demand delivery. Fifty-six percent of millennials expect online retailers to offer same-day shipping as an option, a Trustev survey found. To these customers, paying an extra fee for fast shipping is preferable to waiting an extra day or two.

The key to meeting millennials’ expectations for on-demand availability is integrating your inventory management with your order fulfillment and the other phases of your marketing and sales process, explains Pitney Bowes global business development senior director John Kruzan. Using smart analytics tools that accurately forecast peak demand times for products can give you a head start on making sure inventory is available. Partnering with crowdsourced same-day delivery suppliers that are located near your customers can help you speed up shipping times. For instance, Best Buy partners with Deliv in order to provide same-day shipping in select parts of the country. Another option is using 3-D printing services that are located near your customers. USPS now offers integrated 3-D printing and shipping services.

Managing Mass Customization

Millennials prefer their shopping experiences to be personalized. They want the ability to have input into what they buy and how they buy it. They also want a personal relationship with the companies they buy from. More than half of millennials say they want access to personalized experiences and services they typically don’t get from larger companies, a Bond survey found.

To meet this demand for personalized attention, companies have been using technology to offer customers mass customization, which combines traditional mass production with the ability to select customized features on an individual level. One of the most useful mass customization technologies is 3-D printing, which enables companies to take input from customers before selecting from digital design options. For instance, o-ring supplier Apple Rubber uses 3-D printing to offer customers the ability to choose from over 8,000 customized sizes with a wide variety of options for specialized materials and shapes. Three-dimensional printing and other mass customization technologies can enable companies to maintain a more flexible inventory better suited to meeting the personalized demands of a millennial-oriented supply-chain.