Newly published researched carried out by SAP reveals consumer buying behaviour that provides valuable insights for procurement and supply chain.
The research was carried out based on a survey of 1,000 consumers and reveals spending patterns that reflect the wider economic and psychological milieu, as well as generational disparities in spending patterns.
With the holiday season fast-approaching, the insights to be garnered by the data are perhaps even more acute.
The research demonstrates that current global and national economic woes are at the heart of consumer spending, likely to have a massive impact on procurement and supply chain if they are unprepared.
The data reveals that 75% of consumers believe that a recession is approaching and as such, their spending behaviour is in flux. This means unpredictability for procurement and supply chains, coupled with the holiday season which normally translates to a major uptick in consumer spending.
The unpredictability in the nature of current consumer behaviour however, could spell diffculties for procurement and supply chain.
The data echoes a recent report that Supply chains are “the first to feel the impact” of inflation and recessions and procurement managers must act now to protect businesses from oncoming shocks.
This trend is exacerbated by the revelation that, according to the SAP research, 66% of respondents also plan to change their holiday spending compared to recent years, including 69% Gen Z respondents, as well as 76% Millennial respondents planning to cut-back.
The numbers may prove daunting for organisations who lack the agility to adapt to these changes in consumption. With the impact on consumer behaviour brought about by covid, along with the state of the economy, the data reveals that 39% are shopping online more.
The digitalisation of procurement processes, have the power to offset any potential losses that arise out of such states of unpredictability in consumer spending.
Digitalisation of procurement processes serve to create visibility, thereby acting as a counterbalance to changeability, allowing procurement functions to quickly adapt and plan by remaining agile under unfavourable conditions.
Those organisations who have failed to digitise, will have less insight and therefore prove less agile and able to adapt.
The moral of the story: Whatever your business, digitise your supply chain and procurement processes if you want to succeed.