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  • Writer's pictureJuli Lassow

Sourcing of the Future

someone holding a crystal ball up to the light

I am, by profession and nature, both a lover and student of retail.

I try to stay current on industry trends, and since my particular passion is sourcing, whenever I hear about the latest and greatest retail innovators, my first question is:

"How are they going to make, sell, and ship that?"

So, in the next several articles I will share my thoughts on how sourcing is likely to change over the next few years.

But before I reveal my predictions, I'd like to step back and talk about the key trends in retail that are shaping the sourcing future.

One of these trends is the proliferation of direct-to-consumer businesses.

Direct-to-Consumer Businesses

Direct-to-consumer businesses—DTCs for short—design, develop, manufacture, and sell specialized products to customers without involving a retailer or distributor.

Perhaps you've seen the ads for DTCs that sell mattresses such as or Or you've been intrigued by a DTC like the Dollar Shave Club. Maybe you've browsed a DTC beauty site such as

You've likely bought a product from one of these companies.

If you have, you're right on-trend. Retail Dive recently published a survey that showed: (1) 80% of consumers plan to or have already bought from a DTC, and (2) nearly a third plan to make 40% of their purchases from a DTC in the coming years.

Now, that's a lot of dollars being funneled away from the more traditional retail channels of mass and specialty.

But that's not all. DTCs are also influencing the expectations that consumers have across ALL of retail. Indeed, these companies are customizing their products and making them more accessible than ever before.

Personalization Is the Retail Future

Thanks to DTCs, consumers are beginning to expect a more personalized retail experience that feels uniquely tailored to their needs.

For example, take a look at how sells men's jeans. Or men's dress shirts. Or really, most anything in men's wear. The Bonobos slogan says it all: "Your search for the perfect fit ends here." And to prove that, Bonobos gives its customers all sorts of ways they can customize that fit.

But how are Bonobos and other DTCs able to create this level of personalization? Sure, it's partly ingenious product design, such as the Bonobos "signature curved waistband." But it's also their business model, which is primarily fueled and enabled by capturing a whole lot of personal data. DTCs are expert at collecting, categorizing, and analyzing data such as customer demographics and feedback, and then using this data to drive their businesses forward.

What's more, DTCs have discovered that their customers are willing to share this personal data in return for that amazing DTC product, as long as those products are delivered fast and manufactured responsibly.

More Speed in Delivery

DTCs are redefining retail in many ways, but no one does it better than Amazon when it comes to speed of service.

Way back in 2005, Amazon revolutionized the idea of fast delivery with its Amazon Prime service. Today, this service has over 100 million customers, all of whom are used to getting their orders in just a day or two.

But thanks to Jeff Bezos and his relentless commitment to innovation and customer service, same-day delivery is now a reality for many Amazon customers.

The implication is clear: If your business delivers products to consumers, stop measuring delivery time in days—measure it in minutes.

More Transparency

Millennials and Centennials are also redefining what consumers expect from a brand, especially when it comes to greater transparency into how and where products are made.

Unlike the generations that came before them, Millennials and Centennials don't see brands as a status symbol but rather as a reflection of their own personal values. They'll remain loyal to a brand—and even be an ambassador for it—as long as the brand continues to express what's important to them.

One area where consumers want more transparency is sustainability. But they also want to know about issues such as the working conditions in factories.

Take a look at how, a clothing business, has responded to the demand for more transparency. Not only does Everlane promise its customers "exceptional quality, ethical factories, and radical transparency," but its website allows you to tour its factories.

What Does All This Have to Do with the Future of Sourcing?

If consumers expect more personalization, faster delivery times, and greater transparency, then something's gotta give on the current sourcing front.

In traditional retail, production and distribution networks are based on a model dating from the industrial age, where "creating more efficiency" and "increasing production" reign supreme.

But that won't deliver the personalization, speed, or transparency that consumers are expecting today. Indeed, companies will need to up their game and harness the power of data.

And sourcing, the discipline that makes all those consumer products possible, will need to become more data-driven, too.

It'll need to move from the industrial age to the digital age.


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