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global trade AUSPACK 2021

Australian market leaders discuss ecommerce’s effect on supply chain

Posted on June 26th, 2019 in Insights by AUSPACK

Day one of the AUSPACK 2019 Business and Industry Conference saw some of Australia’s ecommerce elite discuss how the rise in online shopping is shaking up the traditional supply chain model.

The panel was moderated by Dick Heintz, director of Market Knowledge, and featured six leading names in ecommerce:
· Amanda Green, ecommerce expert who has worked for the likes of L’Oreal and Nike
· Liza Nelson, regional account manager for Systech with a chemical engineering and quality background
· Helen Souness, CEO of RMIT Online having previously worked for Seek, Lonely Planet and others

How are new technologies impacting the supply chain?

Amanda Green

Amanda sees the biggest change in the supply chain coming in the warehouse, where technology and automated picking will fuel the growth of ecommerce. Without automated picking, she fears that companies will be left behind and not fulfilling their potential.

“For me, the most exciting thing is reducing the space in parcels and the cost in packaging, and automated picking. Because the internet and ecommerce is growing so much, you need to have a supply chain in place that’s actually going to support that growth. we can’t continue to have this manual picking, one-by-one, because that’s not sustainable if you’re going to get the growth we expect in ecommerce.”

Liza Nelson

For Liza, who works in the brand protection space, there are only positives to emerging technologies. For companies that are seeing their products counterfeited, often to a lesser quality, new tech could spell the end for fraudsters looking for a quick win.

With improved technology, it could be easier and cheaper for companies to protect their protects and brands, as well as for consumers to authenticate them.

She said, “Ecommerce provides the perfect environment for counterfeiting and diverted goods to happen. Today, these bad guys are so sophisticated, they can mimic packaging and the current brand protection approaches to the minute detail.”

“In order to be impactful, I think you need to be a disrupter and open the minds of the industry to new innovation and technology. We’re all used to today’s approaches to brand protection, what you have to remember is that they’re all additive, not to mention expensive, and sometimes you need tools or devices that you don’t readily have to authenticate.”

Helen Souness

Helen talked not about physical technology but about artificial intelligence, machine learning and big data. Companies have been collecting data for a long time and only recently have we seen it put to powerful use. As these processes become more common and more powerful, they’re going to have huge changes on shopping habits.

She said, “I think Amazon has shown how much AI and big data can transform the supply chain. They’re using analytics of what has happened and where demand was in the past to predict where they need the supply and get it to a two-hour delivery in all the major cities.”

“That’s the really obvious one, that they’re driving speed. It’s also able to drive personalisation, as an ecommerce experience for the user, you can start to have such incredibly targeted personalised engines. I use the example of Olay skincare products, you upload a no-makeup selfie and the AI scans your skin to make recommendations on the products you need.”

How do customers’ expectations today drive change?

Amanda Green

Talking about environmental responsibilities, Amanda answered that the changes should come from within a company not from external forces. For some brands, consumers actually expect packaging that reflects pomp and ceremony rather than eco-awareness, so we can’t rely on customers to drive the right sort of change.

She said, “The question should be flipped – it should be the corporate responsibility, we shouldn’t just be driven from a consumer need. I know that’s what’s triggered a lot of companies to do it, but it actually should be from the company perspective we’re driving this. It is quite hard to do.”

“From the brands I’ve worked with, they’re luxury, they’re premium brands, the expectation from the consumer is that they’re going to get this amazing box, they’re going to be filled with beautiful this tissue paper and potpourri. That’s not sustainable, that’s not environmentally friendly, most of it can’t be recycled.”

Liza Nelson

Liza answered by talking about how one of the big players — Amazon — has been making changes to deliver the best service possible to its customers. Rather than try to expand its reach themselves, it has partnered with delivery companies and department stores to offer customers quicker ways to get their orders fulfilled.

She said, “From a personal experience, ordering on Amazon today I notice that there are strategies already in place that allow you to place an order and get delivery that day. It’s not from an Amazon truck, it’s from organisations that Amazon has partnered with. Also, I noticed from experience, with Amazon they’ve partnered with large department stores too so I can pick up an item they already have in stock.”

Helen Souness

While Amanda called for companies to make the first step, Helen said that if your consumers are asking for more eco-friendly and sustainable packaging then you should definitely follow that path. The younger generations are showing that environmental factors are more important to them than any other generation, and their voice is one that should be heard.

She said, “I’d say embrace it. Working in technology for 25 years, you learn what the teenagers are doing now will hit mass market in 10 years, so go there. I don’t think you can ignore desire and increasing concern about corporates and corporate sustainability. There are solutions emerging and the more we drive the market for green solutions, the faster we’ll meet those needs of users.”

Top three takeaways:

  • Technology will (and already is) disrupt supply chains across the country, so embrace change.
  • Adopt corporate responsibility regardless of internal or external driving forces.
  • Technology and partnerships will help companies meet the expected growth available.

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