You don’t even need to have downloaded TikTok onto your phone to become part of the zeitgeist. The ease of which social content can be shared has fueled the proliferation of trends and crazes that often transcend digital boundaries. Sure, when a dance or challenge goes viral, not much is impacted aside from someone’s time and sanity. But, what about when a recipe or product makes the rounds in a big way? All fun and meals? Unfortunately, not for everyone. Social trends have a way of making trouble offline.
Tiktok is proving to be an explosive growth channel for e-commerce brands, but also a major problem for supply chain forecasting. Often difficult to predict, viral products can leave logistics and supply chain teams scrambling to handle demand spikes, and unplanned, complete depletion of safety stock.
TikTok Pasta, anyone? This dish caused a nationwide shortage of feta cheese. Yes, feta cheese. And, when one TikTok user revealed that using Isle of Paradise's tanning spray water refill with a misting bottle was the key to her fake tan, viewers took note. Water Refills sold out at Sephora in less than 48 hours. With loungewear on everyone’s mind and bodies these past couple years, Aerie’s crossover leggings sold out more than six times and amassed a waiting list of more than 150,000 people after going viral on TikTok.
The increased ubiquity of TikTok and the rise of online shopping during the pandemic wreaked havoc on supply chains, threatening product and warehouse stability.
How impactful are viral trends?
It isn’t just TikTok recipes that are to blame for recent shortages. A huge national topic of conversation happening in real time contributed as well: the pandemic. Remember the great toilet paper outage of 2020? Word of mouth spread both on and offline to stock up on toilet paper, of all things, and as a result, shelves remained bare for months.
James R. Bradley, Professor of Operation Management and Information Technology at College of William and Mary, says, “All that virality has a major impact on an already shaky supply chain that’s being affected by the pandemic.“ When TikTok makes some new recipe go viral, the first most responsive way to fulfill that demand is through safety stock,” that is, the reserves of a product waiting to be distributed. But, Bradley goes on, due to pandemic strains on the supply chain, safety stock is limited, especially in the case of perishable items. “If the TikTok trends are significant enough, that safety stock is gone.”
Still, he believes trends will stay contained to what they are –– quick surges of intense interest. In other words, short-term strains won’t have everlasting effects. But, wouldn’t it be nice if warehouses and suppliers didn’t need to weather storms for any period of time?
Technology, AI & automation
The answer lies in developing more proactively responsive and less reactionary systems. In other words, upping their technology game. What are solutions that register potential demand based on social media that can help inform pricing and stocking in real time responses to virality?
While you can’t control viral trends, you can control your technology and visibility. More innovative forecasting tools, such as artificial intelligence, to help predict consumer interest. By using Wi-Fi-enabled cameras and collecting real-time data, for example, Walmart was able to increase overall shelf-stocking efficiency in the meat department by 90 percent, improving sales by 30 percent. And Kroger is leaning heavily on tech to improve the customer experience (and sales), investing in fully automated warehouses staffed by robots.
AI algorithms can be leveraged for their ability to self-learn and create forecasts even when the data is limited. For example, when introducing a new product or testing a new promotion technique, a good AI model can make predictions about products by considering local and regional trends. The same technology can be used for monitoring and predicting highly engaged social moments.
Warehouses also need to adopt modern technology platforms that provide operations teams with user-friendly barcode scanning technology to process orders more quickly in response to demand spikes, while also providing visibility to these spikes to operations with the real-time reporting. Management should immediately be able to view spikes in activity that may signal viral trends.
Keep a pulse on social media
Supply chain forecasters should incorporate brand and product social media mentions into their demand planning to get ahead of spikes. This requires more efficient communication between Marketing and Operations that will allow warehouse teams to better handle viral demand and allow preparation for fast growing product categories.
Support the workforce
When demand spikes occur, warehouse teams are taxed with increased pressure and stress to handle new orders. Ensuring that the mental and physical well-being of the warehouse team is prioritized will allow for a more stable warehouse during viral demand events. Pay attention to overscheduling. Provide adequate time off.
Bottom line: TikTok isn’t just delivering awkward dance trends and karaoke style memes; it has ripple effects across the supply chain. Warehouses must now consider the effects of virality on their supply chains that will become an increasingly important data point to consider for future planning.