The supply chain is key to consumer trust

by Lebo Madiba. The year 2020 catapulted us all into a new reality; a new way of living and a new way of doing business. This has left us with a heightened sense of vulnerability around such core issues as health, family, work, and financial security. In these uncertain times, how do we look to the year ahead with hope? How are we – both as individuals and businesses – going to regain our footing, recoup what we have lost, and secure some level of stability?

With economies around the world faltering and global supply chains uncertain, the focus for South African companies is likely to be on reducing dependence on international supply, increasing local production, and creating meaningful employment opportunities, all while remaining both competitive and forward-looking. There can be little doubt that this will require a new level of innovation and dexterity.

The effects of digital levelling

One of the most notable results the year that we’ve just come out of  has been the  acceleration of digitalisation of business across all sectors. Initially, this involved enabling as many people as possible to work remotely, a development that is likely to become a permanent feature of the business landscape. That was soon followed by a massive upweighting of e-commerce and online shopping capabilities, changing consumer behaviour and shopping patterns for good.

We can expect that the next growth phase will see the range of products and services available online increase in extent and complexity, and three key challenges will  emerge: the challenge of securing supply chains, the challenge of guaranteeing reliable delivery, and the challenge of managing customer trust and loyalty in a very different trading environment. Rapid digitalisation has levelled the playing field, especially in retail, and the hard task of 2021 is going to be one of differentiating brands in the digital space and of winning and maintaining customer trust.

Brand purpose

Brand purpose is also likely to be right at the top of the agenda. In the past few years, this concept has taken centre stage in the consumer consciousness, with customers becoming increasingly alert to what a business stands for, as well as to its environmental and social impact. Connecting with this increasingly aware pool of consumers, who now have greater digital access to a wide range of purchasing options, means that brands need to strengthen their resilience and build long-term value.

Beyond the traditional brand playbook, the value of consumer brands in particular lies mainly in the supply chain, where trust can easily be broken. This is especially likely to happen if there is a lack of transparency, accountability, and a shift in procurement practices, which may render a brand out of sync with its purpose and promise. The integrity of the supply chain and responsible sourcing therefore holds very real potential for brands looking to secure their customer base and build lasting brand equity. In short, customers are putting their favourite brands under scrutiny, and without a reliable, transparent and ethical supply chain, there is a significant risk to brand security and reputation.

Managing supply chain risk

Within this context, managing supply chain risk is arguably one of the most significant tasks businesses will have to undertake in 2021. Historically, companies have focused mainly on the need to reduce costs in the supply chain, but this is going to have to change. A realisation is beginning to emerge that supply chain disruptions can have a major impact on brand reputation and this, in turn, may result in significant losses in sales and a major dip in both consumer and investor confidence. This means that innovative and value-driven supply chain strategies will define which companies emerge as reputation leaders and manage to come out of the change process with greater and more secure reputation capital.

Data collaboration

Finally, collaboration in terms of data management and sharing is likely to be front and centre in 2021. The integration of data, often held by marketing, together with actively canvassed feedback from customers, will enable business supply chains to align with changing consumer behaviour and purchasing patterns. More than placing the consumer at the centre of the marketing message, what will be needed going forward is to place the consumer at the centre of business operations.

Lebo Madiba is Managing Director of PR Powerhouse, a brand builder, a content maven, and a technology enthusiast.

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