Fulfilling the new demand is changing the rules of the game. Huge changes at the demographic and socio-economic level are fundamentally changing the field of consumerism in Israel and all over the world and, in turn, affecting the production and mobility of goods and products. Business owners who want to continue to be an influential player in their field must absorb the change in order to continue to remain relevant.
The changes taking place in the market can be attributed to four major phenomena that are intertwined in a courageous relationship and influence decisions that directly relate to our lifestyle:
- Consistent growth of the large urban centers
- An era of abundance that produces ever-improving purchasing capabilities
- In the vast majority of households, both parents earn a salary
- The level of inclusion is higher than ever.
Consumerism at the speed of light
The changes discussed above are contributing to a steady rise in consumer expectations and pose various challenges to business owners that have not had to deal with in the past. These expectations are reflected in areas such as customization of products and services, including delivery times that until recently would be thought of as science fiction. The bottom line is simply that we have developed a desire to buy anything at any time and get it in a particularly short period of time.
Today’s e-commerce is breaking records every day. According to studies conducted in the field, it can be said with certainty that the volume of traffic of various goods in the network increases on average by about 15% per year. And when we say “online”, we mean everything, not just consumer goods such as clothing appliances and electronics or food. Banking and medicine are excellent examples of personalized services that find themselves safely moving towards a complete digital transformation. It can be stated with certainty that in the not-too-distant future, there will be no place for businesses that do not find a way to satisfy the absolute demand for efficient internet trading.
Significant impact on logistics and real estate
The pace of things has become extraordinarily frenetic. The impact on consumer culture is already universally understood, but in the background, additional processes are taking place that are beginning to affect the logistics closely linked to commercial real estate.
The intensifying demands for efficient inventory management, increased production, excellent service and fast delivery require logistical assessments that have a broad impact on the range of expenses required for the day-to-day operation of this entire complex operation. Raw materials are becoming more expensive, shipping and mailing prices are also rising steadily, storage and maintenance of the designated storage areas generates another additional expense. At the same time, the salaries of the giant teams that operate all this beauty are also rising, and giant companies such as Amazon are investing huge capital to create robotic solutions designed to cut back on their large workforce.
One other clear fact that we all know is that the price of real estate is continuing to rise. The demand for logisticsareas continues to intensify worldwide, and Israel is not unusual in this regard. It should be kept in mind that Israel’s area is comparatively small and its residents are already considered outstanding network buyers, a fact that places a strong demand on logistics areas today, but one that will remain on a relatively small scale in the near future.
Where does all this go?
The next step will be no less interesting. Logistics centers for sorting and shipping are already being established on a large scale, but this trend is also about to undergo an interestingshift. After all, we all know howChina achieved dizzying growth following the relocation of the production centers of the largest companies in the world to its territory. To this day, the Far East is considered a preferred destination for manufacturers due to the low production costs resulting from the availability of cheap labor.
The United States, in its constant search for cheaper and more efficient production and transportation processes, has in recent years shifted its centers of activity from the East to nearby Mexico. Western countries and large corporations understand where the winds are blowing and are already trying to move production itself closer to home, to the big urban centers.
Looking ahead, once they solve the challenge of running a leaner supply chain, what will production and supply chain managers need to focus on for the next decade? What is the future of mobile technology? Can we shop by talking to the wrist, and make sure that customized products will land via a drone on the roof of our apartment building two hours later? Will 3D printing contribute to the demise of certain manufacturing industries? Will the import of raw materials into the urban centers themselves mark the end to the expensive maintenance of finished products kept in stock? Will cars and trucks drive themselves, making delivery ultimately easier to manage than it is today?
If you thought that the situation today was challenging, here’s a little taste of the future to come.
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