Global supply chains have been transformed over recent years, with the continuation of trends that emerged during the pandemic. This is most obvious in the heightened consumer preference for e-commerce, with 89% of UK consumers confirming that they’d made an online purchase in the year up to December 2023. Continued economic struggles and geopolitical tensions have also had an impact, with difficulties in forecasting and fulfilling customer demand. Read on as we explore the key supply chain trends and challenges here.
The Rise of the Demanding Consumer
As mentioned, there’s been an evolution in consumer demands, with the expectation that businesses will ensure rapid delivery and seamless experiences. Success in meeting such demands depends on the development of dynamic and flexible supply chains. The use of digital tools has become key in ensuring the accurate prediction and delivery of products, with e-commerce integrated into every aspect of the supply chain.
These customer demands must also be met in 2025:
- Transparency in terms of product ordering
- The delivery of personalised experiences
- Assurances over sustainable sourcing and eco-friendly product qualities
The affordability of products is another key factor, with consumers continuing to feel the impact of the cost-of-living crisis. Businesses have had to adapt through the introduction of cost-effective alternatives and flexible payment options.
The Sustainability Imperative
The focus on sustainability is clear, with a Capgemini report revealing that 66% of consumers choose to buy certain products or services due to their “environmental friendliness”. There’s particular concern over the sourcing of goods through international supply chains, with many consumers also looking for assurances over the humane and fair treatment of workers. 79% of consumers have been reported as changing their purchase preferences due to impacts in terms of social responsibility, inclusiveness, and environmental impact. Organisations such as P&G and H&M have responded with the introduction of eco-friendly products in sustainable packaging.
Sustainable companies stand to realise benefits, including:
- Reduced costs through energy efficiency, waste reduction, and resource optimisation
- Enhanced brand reputation and customer loyalty
- Improved regulatory compliance and the avoidance of penalties.
Reliability in an Uncertain World
Reliability has always been a key focus, both in terms of the customer-business relationship and the delivery of quality products. This remains the case, despite the variety of supply chain disruptions, with 83% of consumers refusing to do business with brands that they don’t trust. However, there’s no denying the challenge of establishing and maintaining such trust, as 93% of companies have reported supply chain disruptions due to events such as the COVID-19 pandemic and geopolitical conflicts. Uncertainties over the global economy and looming tariff-driven trade wars are also bound to have an impact.
Supply chain resilience and reliability can be improved through the use of technologies such as generative AI. Besides the analysis of supply chain data and the generation of accurate forecasts, such systems enable the stress-testing of scenarios and planning for the avoidance of disruptions. Gen AI can make a great difference in terms of supply chain adaptability, with lessons being learnt and operational performance improved. We’re also expecting to see the diversification of the supply chain, with more businesses opting for nearshoring, multisourcing, and regionalisation in light of global tariff changes.
Looking to the Future
Given the fragility of international supply chains, the investment in digital infrastructure and analytics will be vital. Such investments should help in the satisfaction of customer demands for the rapid delivery of high-quality, personalised, and ethically sourced products. Big data should be leveraged for insights into the range of supply chain disruptions, with knowledge ideally being shared on how to overcome such challenges.
As Guy Elliot, EVP and Retail & Consumer Products Lead at Publicis Serpant, says, “From IoT-enabled inventory tracking to blockchain for provenance and digital twins for scenario planning, the focus is now on integration and orchestration. It's no longer about point solutions. The real value comes when data flows across systems, partners, and functions, enabling smarter decisions at every node of the chain."
We expect to see a focus on the development of customer-centric supply chains, with digital tools being used for improved agility and transparency. Such tools will enable the collection and analysis of insights, with order visibility, shipment status, and product availability transparency all key for customer satisfaction. The most successful businesses will be those that act and adapt based on such data.
Thriving in the Age of the Conscious Consumer
From the increased demand for ethically sourced products to the wider use of advanced technologies, these are the supply chain trends expected for 2025 and beyond. Businesses must take a proactive and flexible approach for the best chance of navigating disruptions and ensuring optimum customer satisfaction. There should be an openness to knowledge sharing for improved supply chain resilience and efficiency.
Being held at the Birmingham NEC from the 23rd to the 25th of September, the PPMA Total Show will provide the ideal opportunity to gain valuable supply chain insights. There’ll be the chance to network, source new ideas and solutions, and meet with potential new suppliers all under one roof. Go ahead and register your interest in the “free to attend” exhibition today.