As the holidays approach, global supply chain slowdowns and shortages are becoming detrimental to brands and retailers. But according to experts, certain tactics can help keep shoppers satisfied in stores — even amid the shortages.
Pandemic-related shipping slowdowns, factory shutdowns, and clogged ports have made it difficult for retailers to receive enough inventory to meet demand. Items like sneakers and apparel from places like China, Malaysia, and Vietnam will see the most impact.
According to Vic Drabicky, founder and CEO of consultancy January Digital, retailers that haven’t already secured their inventory for the season will inevitably face shortages. Therefore, the best way to manage expectations of consumers is to be as proactive and honest as possible about the shortages via marketing, customer service, and store associates.
“I think consumers are aware of that as an overarching issue,” Drabicky said of the supply chain slowdowns. “So for brands, your best bet is to under-promise and over-deliver. Over communicate every chance you get and make sure you set the proper expectations.”
According to Drabicky, consumers might be upset about the lack of options, but they’ll still appreciate the honesty.
The supply chain slowdowns are also impacting how retailers will carry out promotions this year. Shortages and delays will cause demand to outweighs supply. This means that retailers have the ability to sell more items at full price. It also means there’s a risk that shoppers turn away from a brand that cannot offer exactly what they want.
“[Shoppers are] not going to show up empty handed,” said Sarah Engel, chief marketing officer at consultancy January Digital. “Your job as a marketer is to make sure that you help redirect them to a different product of yours, to a gift card of yours, to make sure that you keep them within your ecosystem.”
In other words, retailers and brands offer a variety of options for consumers to replace what would have been their first choice purchase.
When it comes to digital businesses, online retailers should prepare for a “Shipaggeddon,” explained Jason Boyce, an Amazon expert and the founder and CEO of Amazon seller management group Avenue 7 Media, LLC.
“This holiday season, shipping and out-of-stocks will be much worse than last year,” Boyce said. “In addition to supply production issues, Amazon is placing Quantity Limits on sellers’ entire businesses. That means best-selling items will be out of stock during the busiest season.”
Despite the concerns, experts don’t believe the shipping crisis is here to stay. Syracuse University professor of supply chain management Pat Penfield said that while the holiday season will be tight, the backup will likely ease up in later months.
“There will be some amazing deals once the shipping containers are unloaded, but that may not come until January or February or March,” he said.