Sustainability may not be top of mind as businesses scramble to keep up with the volatile ebb and flow of supply and demand during the COVID-19 crisis, but supply chain leaders should be thinking about what’s next for maintaining sustainability and dealing with the potential aftereffects of the pandemic. Here are predictions from three fierce female supply chain marketing experts (we’ll let you guess which ones are the moms and which ones are millennials).
Christina Christensen: A minimalist approach to the “new normal” leads to long-term gain
As we watch the fascinating collateral benefits of social distancing unfold due to the reduction of human impact on the environment, we grasp onto this “silver lining” and the implications for the planet. However, decreased emissions and noise pollution will likely not be a lasting trend. Viral pandemics and economic blackouts are not a sustainable, nor desirable, way to improve air quality and reduce seismic waves.
Nevertheless, we can make this a permanent movement for the earth if we take this opportunity to become more self-aware of how we responsibly practice conservation in our daily lives. The stay-at-home order in place has taken the lid off our own sustainability practices (or lack thereof) in my household. With constrained access to food and daily supplies, I shudder to think of the days of yore with the elaborate packed lunches that I would send off to school with fussy eaters, only to return home unopened and spoiled. There were condiments judiciously pitched in the garbage 24 hours before they reached their expiration date, and loaves of bread carelessly laid to rest at a pinhole of discoloration. And don’t get me started on the “sacred paper.” We were extremely wasteful.
The pendulum has now swung dramatically, and we are taking a more minimalistic approach to conserve food and energy and reduce waste. In this time, we have come to value all that we have and realize how much less we need. This crisis has again unearthed a state of being we should have been living naturally. If everyone practiced conservation at a micro level this could serve as a pathway to sustainability at a macro level.
This is similar to how supply chains become responsible and resilient. We all represent the end consumer so the more conscious we become of eco-friendly practices, the more supply chains are forced to adapt. Just as we have high expectations for companies we purchase our products from to have waste-reduction strategies in place, we too have an awakened responsibility. Instead of a fad, conservation is becoming a necessary means for sustainability in a new and uncertain reality.
Manda Schweitzer-Miller: Purging and splurging creates volatile demand
With people locked up indoors surrounded by their stuff for endless hours, people are re-evaluating what they really have and what they really need. Some are taking the Marie Kondo approach to their homes, purging things into piles to donate or to sell on places like Facebook, Craigslist or online consignment stores like ThredUp. This can be a good avenue to reuse and recycle products – one person’s trash is another’s treasure. It’s also often cited as the most sustainable way to purchase clothing. With the influx of clothing donations, more people may be turning to resale than to their normal retailers or fast fashion. From a supply chain perspective, this oversupply of thrifted items could cause a dip in demand and an oversupply in inventory for retailers, leading to excessive waste and even further discounting.
On the flip side, due to the closure of non-essential businesses, parks and the like, some people are making big purchases to fill the void of their lost, normal conveniences. For example, sales of personal exercise equipment, children’s toys and swing-sets are seeing a spike. This dramatic increase in demand can send suppliers scrambling to meet a sudden – but likely fleeting – spike in demand. While we need to fill the days of children missing daycare and school, these big purchases are not intended as “disposable” in the grand scheme. While clothing and other smaller items may be filling the resale market today, it’s foreseeable that when this period of social distancing is behind us, these big ticket items will also be popping up for sale in your social media feed.
Jenny Reese: Digital detox will become a double-edged sword when businesses reopen
For omnichannel retailers, social media apps and subscription streaming services, COVID-19 has made for one hell of a captive audience. But while everyone’s been busy learning dances on TikTok, online shopping and obsessing over Tiger King, the world’s supply chains are prepping for a major revolution. Sustainability in the time of the coronavirus has made minimalism the new black, and while the global shutdown has indeed been beneficial to the environment and our closet space, it’s only temporary — and supply chain leaders know it.
Once this crisis passes, we have to expect sharp spikes, lulls and shortages in supply and demand. One contributor to those spikes is likely to be a digital detox the world over. After weeks and months of sheltering in place, people will be anxious to get out of their homes, connect with family and friends and most importantly, disconnect from the devices they’ve been chained to. What does that mean for the supply chain? A few things.
Once buyer’s remorse sets in with all those panic buyers and bored online shoppers, it’s likely that retailers will get hit with massive returns — and consequently, major demand for reverse logistics. Many of those items that slowly made their way through a disrupted supply chain will now have to make their way back, doubling down on the carbon footprint for every item returned. Costco shut this down quickly, notoriously banning returns on toilet paper, paper towels, sanitizing wipes, water, rice and Lysol.
Another side effect of digital detox and a return to simpler times is demand spikes for things like outdoor equipment, paperback books and travel. And those who are cash poor post-virus are likely to run up credit card balances, contributing to even greater demand. Will sudden, excessive travel drive pollution through the roof? Will liquor stores and vice brands face the next disruption? Or will people miss parties, restaurants and bars so much that they binge on nights out instead of Netflix? Will a rise in book sales (as people may be reluctant to visit local libraries) contribute to global deforestation?
For now, the only certainty is uncertainty—but businesses that are prepared for the unforeseen with supply chain scenario modeling will be able to map out the most efficient, sustainable plans for people, profits and the planet.
Learn how companies are mitigating risk and responding to disruption in our brochure 5 disruption response best practices.