From the outset, the Coronavirus disease (COVID-19) has disrupted many industries, retail being just one. With 56% of global retailers reporting moderate disruption to their supply chains and 12% reporting heavy disruption, the pandemic has led to a need for clear visibility over the structure of supply chains.
Only a small minority of companies were in the position to secure constrained inventory, or source capacity at alternate sites at the beginning of the pandemic, and it was clarity over supply chain structure that was key for business continuity.
Now a year in, businesses are still finding themselves adjusting to the “New Normal.” Being proactive during these challenging times is critical, and merchants need to make adequate investments, re-writing contracts expeditiously to create solutions and allow operations to proceed.
One of the most fundamental changes retailers have experienced is where and how consumers are shopping. Since the onset, e-commerce has registered the equivalent of 6 years’ worth of growth, with online retail sales showing a 53% year-on-year increase.
As a result, 64% of retailers worldwide have adapted their supply chain for e-commerce, and its vital that merchants optimize e-commerce channels and implement online trading within long-term strategies to ensure they are not left behind.
· Put forecasting in place to analyze demand and allow for adjustments in product volume aligned with retailer demand.
· Review e-commerce advertising and promotion spending to ensure budget is allocated to products which are in stable demand.
· Assign resource to manage SKU-level details to expand product management capabilities.
There has been a shift in customer service from speed to transparency and understanding the full network of suppliers allows merchants to be more resilient and focus on strengthening vulnerabilities.
Investing in supply network mapping will allow merchants to stay up to date with the fast pace of retail, giving key insights to help businesses thrive.
Warehousing and stock management
Merchants are now evaluating the geography of their supply chains, especially since the start of the pandemic. Focusing on consumer behavior change is crucial and allows further insight when planning for demand.
If suppliers can be located in more than one place across the globe or goods are stored in strategically located warehouses, not only will it take less time to get to end-consumer markets, but it also limits disruption, which has been notable throughout the pandemic, leading to brand and product switching from consumers.
Nearly 28% of retailers reported having to deal with shortages and out-of-stocks and recent research has found that between 30-40% of consumers have been trying new brands and products as a result of their desired product being unavailable, emphasizing how essential planning for demand is.
In addition to planning for demand, marketing strategies also need to be adapted to fit consumer attitudes of the time with spend altered based on the results of your ROI, frequency and reach.
Merchants should also take advantage of digital platforms to see where their consumers are browsing. Throughout the pandemic there was a notable increase in screen time, and it’s important to ensure that data is retrieved from marketing efforts, so campaigns can be adjusted appropriately and the insights can be used to your business’ advantage.
The pandemic has put a lot of strain on merchants, and understandably, it’s been a challenging time for all in the supply chain sector. Being proactive is key, and now is not the time to get behind. The pace within the industry is advancing at a rate never seen before, and that just contributes toward the importance of investing into your supply chain.
COVID-19 has undeniably caused a huge impact within the supply chain industry and merchants need to adapt in order to keep up.