"Perhaps the best way to look at how all this is impacting supply chain practices it to look at the end of the chain and work backwards," says Patrick Kelleher, Senior Vice President of Sales and Business Development, Americas for Westerville, Ohio-based Exel, the contract logistics and supply chain management firm.
As relates to consumer behavior, what we're seeing is more price comparison and a willingness to trade away from a brand name product or to substitute one product for another," Kelleher
"Certainly, that's increased competition for discretionary spend versus what we've seen in the past, and it's also led to even more concern over having the product that customers are looking for on the shelves at the right time to capture what little discretionary spending they're doing."
Therefore, retailers need to ensure they have both brand and private-label brands fully stocked on their shelves.
Many consumers are still very brand loyal, but the private-label items should be positioned to capture the flexible spend of the other consumers, too.
According to Kelleher
, "The basic premise underlying supply chain activity remains the same - a retailer's success in the marketplace hinges largely on its ability to optimize inventory flow, and they continue to reach out to best-in-class logistics providers that have the tools they need to get product to the right place at the right time.