The COVID-19 pandemic permanently altered the fabric of society, and the supply chain is no exception. Throughout 2020 and 2021, inventory management tools dominated the industry to combat chronic stockouts due to surging demand and international discrepancies in COVID-19 safety protocols. 

However, the eruption of geopolitical tension in Ukraine created a new paradigm: the need for visibility into the transportation of raw materials, parts, and finished goods across the entire supply chain process. It’s more important than ever for logistics professionals to find the best transportation model that considers disrupted trade routes and fractured supplier networks throughout Russia and Ukraine. 

Two types of software that best solve this problem are supply chain visibility (SCV) software and transportation management systems (TMS), and G2 data confirms the market’s interest in resolving new barriers toward economic stability with these tools.

The Ukrainian-Russian war shifted priorities 

Logistics professionals were regaining control over their supply chains in January 2022 after two years of product sellouts by adopting inventory control and demand planning software. The destruction of infrastructure in Ukraine, one of the world’s largest suppliers of commodities, and international sanctions against Russia, a huge player in the oil industry and an OPEC+ country, caused a new crisis in sourcing and transporting raw materials essential to a global economy. OPEC and OPEC+ countries are the world’s largest oil exporters and set the stage for supply and prices, so international hostility toward a member can lead to turmoil. The shuttering of the Russian economy due to international sanctions and businesses leaving the area can result in decreasing oil production, which means skyrocketing energy prices that stress consumer finances and disrupt manufacturing and logistics.

Although these tools sound similar, TMS is a distribution system out of which multiple end-users operate to store information related to transportation. However, a TMS without external integrations fails to collect all data necessary for total visibility, especially if a company outsources some operations to third-party logistics providers with their own databases. But operating TMS and SCV in unison allows businesses to collect data from multiple sources to track raw goods, plan trade routes, and select the most efficient distribution model. 

Inventory control isn’t driving the market anymore

A year ago, any analyst would tell you that maintaining appropriate stock levels to meet surging consumer demand was the central focus of stabilizing the supply chain. For this reason, inventory control software was dominating the market. However, geopolitical conflict and concomitant concerns over inflation are changing logistics strategies.

G2 is a microcosm of the global economy that shows us the direction the supply chain is headed, and proprietary traffic data pulled on September 28, 2022, confirms this shift from prioritizing inventory control to transportation and visibility.

This graph plots the categories from the 2022 supply chain trends that had the most growth throughout 2021 (Barcode, Inventory Control, Label Printing, and Demand Planning software) against Transportation Management Systems (TMS) and Supply Chain Visibility software. 

Although inventory control used to dominate the market, one can see a steady decline over the past year while TMS overtakes it in terms of category traffic. SCV also gained moderate steam over the past year. This data confirms predictions made in G2’s LinkedIn Live in March 2022 about the Russian-Ukrainian conflict’s impact on the supply chain, specifically around TMS. Traffic data was programmed into statistical analysis software to build a linear regression model that used the time elapsed as a predictor variable for category traffic. A statistically significant, positive relationship between time passing and traffic was observed, and this observation stands six months later. Although this model only measures one variable in a complex situation and experiments are needed to prove causation, G2 data that mirrors current events provides powerful insight into the impact of current events on buyer behavior.

A significant uptick in visitors researching SCV software is also evident when segmenting the above data for only SCV and transforming it to represent the percentage change in traffic compared to July 2021.

Traffic saw the most dramatic and singular increases during February, March, and July 2022. February and March marked the rapid escalation of tension, and economists started sounding the alarm for a potential recession due to supply chain-driven inflation in July. People are looking for solutions to these problems, and finding B2B software on G2 is one way for logistics professionals to do this.

G2 must be part of TMS and SCV vendors’ marketing strategy

Social proof is at the core of all purchasing decisions today. This phenomenon is so pervasive that Google identified a phase in the buying process called the zero moment of truth (ZMOT). The ZMOT is the step in which consumers research reviews before making a purchase decision, and we’ve all been there. Whether we’re strolling through ratings on Target before picking laundry detergent or perusing Yelp for the best Chinese restaurant in our neighborhood, trust has shifted away from push marketing toward peer reviews. 

The importance of social proof is, however, not limited to B2C products. The 2022 G2 Software Buyer Behavior Report showed power has shifted toward buyers because they are “spoiled with choice.” Product marketing is starting to mirror omnichannel strategies seen with traditional B2C advertising, so vendors must find ways to stand out from the competition as buyers' consideration sets expand greatly. It is no longer optional for peer review sites to not be part of vendors’ marketing mix, as the Buyer Behavior Report found that 85% of respondents said they reference review websites during the purchasing process. G2, thus, can be instrumental in helping SCV and TMS vendors expand their customer base by riding the momentum from changes in the industry.

Some vendors, however, express a hesitation to launch review campaigns out of fear that their Satisfaction scores will suffer. However, vendors must consider two things to deconstruct this fear. First, given stable and predictable conditions, we often find in disciplines such as survival analysis and calculus that some data sets converge toward a certain value as the number of observations increases infinitely. Thus, it follows that a product continuing to deliver (or even improve) on its value proposition will see its rating center on a certain value. The long-term stability of customer reviews is seen in G2 data pulled on August 1, 2022, about SCV vendors who are market leaders in G2’s Grid^Ⓡ Report. 

This graph shows the percentage of buyers who said the tool met their business requirements over the past four quarters.

project44 and FourKites have the most amount of reviews in the Supply Chain Visibility category, and their Satisfaction score remained consistent. Shippeo was only recently added to the category and has fewer reviews, so we observe an artificially inflated Satisfaction score that trends toward the ratings of more established products as time passes. Thus, concern over score deflation is not warranted if one’s product delivers on its promises and evolves with market forces. On the contrary, the weights of individual reviews decay over time in G2 algorithms, so failing to generate new customer feedback or have buyers update old reviews can actually harm one’s position on the Grid^Ⓡ. Prioritizing G2 in your communications strategy thus sets you up for success by harnessing the power of social influence. 

Second, the fear of a decreasing score assumes the actual number of stars is the most important factor in buyer decisions. A lowered score, however, does not necessarily spell doom for vendors. Consumer psychology research shows customers would rather buy a four-star than a five-star product, especially if the lower-rated product has lots of reviews. This phenomenon is attributed to consumer skepticism toward products that have no critical feedback. Consumers suspect a company is astroturfing when this happens, which is an unethical public relations technique where stakeholders in a company flood review sites with glowing evaluations that offer no constructive criticism. To note, G2 prevents this with the authentication process by excluding reviews written by someone with a vested interest in a product when scoring vendors against one another. G2 can be a crucial element in the marketing mix when supply chain software vendors dispel these myths about peer reviews.

Peer endorsement will shape the buying of supply chain software 

Consumers and businesses alike are increasingly wary of push marketing and instead relying on the opinions of their friends, family, colleagues, and netizens. Some vendors are leveraging this zeitgeist by making G2 a central component of their business strategy, and it is paying off. Hypergrowth vendor ActiveCampaign recently became one of 17 out of more than 130,000 products to hit 10,000 user reviews, and it maintains a high score of 4.6 out of 5 stars and has a G2 integration. With logistics professionals turning to SaaS to ameliorate disarray and avoid a recession, SCV and TMS vendors must place their bets on peer review platforms to gain a competitive advantage.

Edited by Sinchana Mistry