After weathering the blows to supply chain operations in the last few years, mid-market retail and consumer packaged goods companies have plans to change their supply chain strategies, according to a new survey from Carl Marks Advisors' managing director and former Sephora CEO, Howard Meitiner.  

More than half of respondents plan to diversify their supplier base (53%), while a substantial percentage plan to increase onshoring (46%), invest more in supply chain technology (44%) and increase automation (43%). Fewer than 1% of respondents said they planned on taking no actions to evolve their supplier chain. 

Artificial intelligence (AI), unsurprisingly, was top of mind, with more than half of respondents saying they plan to invest in AI to support their marketing (56%) and financial forecasting (52%), and fewer than 1% reporting no AI investment strategy for the coming year. 

“Obviously, AI is going to be a critical component of future strategies, and I was surprised how low the acknowledgement and priority of AI was with a lot of people that answered,” said Meitiner. “If you go back to the late 90s, if you didn’t have a website, you weren’t in the game. If you’re not doing AI today, you’re not going to be in the game.”

Meitiner said AI would be a significant boon to businesses, not just retailers, because it will help with logistics and forecasting, but also with taking over manual, repetitive tasks, leaving employees to use their brains for more problem-solving, complex tasks. “So the first thing that struck me was, why isn’t it 100%? Which chief executive thinks they can afford to ignore AI?

Read More: How AI and Automation Are Poised to Revolutionize the Supply Chain Industry

There was also a lot of emphasis on improving the customer experience in innovative ways – one of the many aspects that AI can help with. Retailers said they are prioritizing simple and efficient transaction processes and payment options to enhance the customer’s buying experience, with 37% of respondents investing in buy-now-pay-later programs and 36% focusing on implementing same-day delivery options.

There was relatively little emphasis on supply chain sustainability – it didn’t make the list of the report’s top four “Key Takeaways.” 

“It hasn’t been raising as much noise as in the past, because it’s an accepted part of the strategic plan that companies have,” said Meitiner. “It’s not getting as much coverage, but it’s still happening, and will continue to happen. I don’t think it’s gone away, Maybe because of all the other things going on that are occupying an executive’s mind, it wasn’t raised, but it’s still part and parcel of the strategy these days.”

Overall, the report found most executives are feeling optimistic about business. Less than 10% of respondents expected sales to decrease year-over-year. 

Carl Marks Advisors sponsored the online survey from October 26-November 10, 2023. In total, 250 responses were collected from executives and C-suite professionals at middle-market retail and CPG companies with annual revenues between $25 million and $300 million.