San Antonio, TX—One worry about the pandemic recession for Stephen Spivey is how much more can America's working-class take? While most people have adapted to e-commerce and contactless communication with their automotive techs, Spivey tells AMBW that the automotive aftermarket is pivoting and reorganizing down the supply chain's final yard. This market researcher for Frost and Sullivan finds that the logistics infrastructure is meeting the industry's challenge.
2020 marked the year when online purchases spiked when Covid struck. Describe which changes companies are making to accommodate shopper demand.
The main changes at the store level have been curbside delivery and contactless service. Large retailers were doing this before the pandemic, but now everyone does it. Doctor consultations now take place over the phone instead of in an office. When you go in for an oil change, you now sit in your car while the work is done. The “last mile” has become the “last yard,” if you will. And more than ever, companies have taken that responsibility to greater heights.
As one of the industry's leading consultancies, what keeps you up at night?
I’m concerned about how the pandemic and potential election fallout will affect us economically. And I worry that the American middle class may not fully recover. Demand for delivery services will not grow if consumers do not have money to spend.
What challenges and opportunities do you see in streamlining more efficient delivery that the industry is not picking up on?
We risk overlooking the traditional consumers' needs, whose habits are unaccustomed to online shopping, crowdsourced delivery, and other technology trends. We must invest in the resources to reach the elderly and poor. One thing I have learned from years as a marketing consultant is that many suppliers offer similar products. But only some provide exceptional service too. And that’s where the opportunity lies.
What best practice questions should retailers and wholesalers be asking?
Offices are closing as its employees work from home. Ask yourself how much physical space do you truly need? On-demand warehousing is emerging as a new online marketplace for retailers and distributors to trade square-footage back and forth. If appropriately managed, reduce leasing and ownership costs. I think of it as the logistics industry’s equivalent of work from home.
Which innovations should the industry be on the lookout for in the near term?
In addition to on-demand warehousing, we will witness the implementation of drones, automated guided vehicles (AGVs), and autonomous transportation to alleviate the growing strain on delivery services.
Does it make sense that businesses reorganize its supply chain and logistics processes?
Not necessarily. It depends on the industry. Inside the automotive industry, I see redundancies in the supply chain that will not stop producing new cars and trucks. But if you move to the aftermarket, the supply chain is much more dependent on China that is less affordable than it used to be. Some of our research partners have detected a shift in brake parts from Chinese manufacturers to India and Latin America.
What do you foresee in 2021 of delivery services?
I see a strong year marked by record-setting GDP growth as we emerge from the pandemic. And there’ll be a burst of consumer confidence as more people return to work supporting high growth for freight transportation, warehousing, freight forwarding, and parcel delivery.
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