If you’re a brand manager looking for reassurance about the 2021 holiday season, Amazon’s recent earnings might not have been comforting. While the e-commerce giant saw a nearly 50% drop in earnings, the more concerning headline was that it acknowledged that supply chain woes would have a big impact on Q4.
Around the world, we’re seeing a steady drumbeat of grim headlines: congestion at ports, overextended ocean transport, trucker shortages, and stressed manufacturing facilities. Even if we could solve all of that with a magic wand, we’d still have our own backyard to worry about: reluctant workers, trucker shortages, and inventory injection limits.
The holiday season was never easy for brands and retailers, but at least there was logic to it. Companies typically frontloaded orders to ensure they had enough stock on hand to meet demand. They would then make an educated guess as to the right channels for distribution, and sprint to get inventory in place as quickly as they could. It was always a mad dash to the finish, but one that was reasonably predictable and familiar.
No more. The only easy prediction we can make this year is that demand will almost certainly outstrip supply. Companies will find themselves scrambling to keep products on the right shelves at the right time. Rather than worrying about agile or just-in-time methodologies, they’ll be looking at something new: real-time commerce. In simple terms, this means that they’ll have to continually make practical decisions on the fly to prioritize channels as supply becomes available.
Here are a few guidelines for real-time commerce during peak season and beyond.
Meet your people where they are. Typically, supply chains facing the holidays have had a lot of levers they could pull to fill their needs: temporary employees, mandatory overtime, and even bonuses. But right now, we’re seeing historic demand for employees, and those levers are gone. You simply cannot make huge demands on employees without sending them across town to your competitors. You have to balance the demands of the industry with meeting and addressing employee concerns. Besides, with the industry growing, we’re going to need to find ways to make working a better option than leaving. It can start this holiday and continue into the future.
Think marathon, not sprint. Because it’s unlikely you’ll be able to frontload excessive inventory and ship it out as needed, you need to be prepared for the long haul. Look to stagger product deliveries in order to have a smaller, continuous supply. Then, monitor your channels and shift supply on the fly to get products to where they’re needed most. This will require continuous, tactical attention much more than strategic planning.
Get flexible, agile partners. Unless you’re a large brand, chances are you’ll be working with third-party logistics partners to get your products from factory to store. To do so, they’re going to need to be agile and flexible to meet demand where it arises, so it’s important to make sure that they can handle every channel where your customers are likely to shop. It will be especially necessary to have a good relationship with Amazon.com, which became a go-to for panicked consumers in 2020 and could become one again.
Remember the stakes. Supply chains have never been the ultra-exciting part of any business, but during the pandemic, they’ve become the backbone of customer loyalty. As many as 75% of people tried new brands during the past year. If customers are looking for your brand and can’t find it, they’re going to move on to someone else and may stay there. As a result, the once-taken-for-granted supply chain has become a vital component of brand equity like never before.
It’s worth pointing out that most CEOs and other key executives at brands focus on the more visible parts of the business, like product development and communications. That’s fair, as they typically lie well within their areas of expertise. Most people who launch a brand aren’t particularly aware of supply chains, as they’re something that, when done correctly, no one should notice. But when they are done poorly, they can wreak havoc on the business, especially during times like these.
Brands can no longer afford to leave such an important consideration to a far-off silo. Find an expert to guide you, or a trusted partner who’s reliable and able to flexibly ship your products where they’re needed. Make sure you’re supporting your team and building their loyalty for a long haul, in which real-time decision-making will be of the essence. And realize that your brand is depending on you. If your products arrive on time and intact, you may be well on your way to winning the holidays.
Brian Birch is chief supply chain officer with Netrush.
If you’re a brand manager looking for reassurance about the 2021 holiday season, Amazon’s recent earnings might not have been comforting. While the e-commerce giant saw a nearly 50% drop in earnings, the more concerning headline was that it acknowledged that supply chain woes would have a big impact on Q4.
Around the world, we’re seeing a steady drumbeat of grim headlines: congestion at ports, overextended ocean transport, trucker shortages, and stressed manufacturing facilities. Even if we could solve all of that with a magic wand, we’d still have our own backyard to worry about: reluctant workers, trucker shortages, and inventory injection limits.
The holiday season was never easy for brands and retailers, but at least there was logic to it. Companies typically frontloaded orders to ensure they had enough stock on hand to meet demand. They would then make an educated guess as to the right channels for distribution, and sprint to get inventory in place as quickly as they could. It was always a mad dash to the finish, but one that was reasonably predictable and familiar.
No more. The only easy prediction we can make this year is that demand will almost certainly outstrip supply. Companies will find themselves scrambling to keep products on the right shelves at the right time. Rather than worrying about agile or just-in-time methodologies, they’ll be looking at something new: real-time commerce. In simple terms, this means that they’ll have to continually make practical decisions on the fly to prioritize channels as supply becomes available.
Here are a few guidelines for real-time commerce during peak season and beyond.
Meet your people where they are. Typically, supply chains facing the holidays have had a lot of levers they could pull to fill their needs: temporary employees, mandatory overtime, and even bonuses. But right now, we’re seeing historic demand for employees, and those levers are gone. You simply cannot make huge demands on employees without sending them across town to your competitors. You have to balance the demands of the industry with meeting and addressing employee concerns. Besides, with the industry growing, we’re going to need to find ways to make working a better option than leaving. It can start this holiday and continue into the future.
Think marathon, not sprint. Because it’s unlikely you’ll be able to frontload excessive inventory and ship it out as needed, you need to be prepared for the long haul. Look to stagger product deliveries in order to have a smaller, continuous supply. Then, monitor your channels and shift supply on the fly to get products to where they’re needed most. This will require continuous, tactical attention much more than strategic planning.
Get flexible, agile partners. Unless you’re a large brand, chances are you’ll be working with third-party logistics partners to get your products from factory to store. To do so, they’re going to need to be agile and flexible to meet demand where it arises, so it’s important to make sure that they can handle every channel where your customers are likely to shop. It will be especially necessary to have a good relationship with Amazon.com, which became a go-to for panicked consumers in 2020 and could become one again.
Remember the stakes. Supply chains have never been the ultra-exciting part of any business, but during the pandemic, they’ve become the backbone of customer loyalty. As many as 75% of people tried new brands during the past year. If customers are looking for your brand and can’t find it, they’re going to move on to someone else and may stay there. As a result, the once-taken-for-granted supply chain has become a vital component of brand equity like never before.
It’s worth pointing out that most CEOs and other key executives at brands focus on the more visible parts of the business, like product development and communications. That’s fair, as they typically lie well within their areas of expertise. Most people who launch a brand aren’t particularly aware of supply chains, as they’re something that, when done correctly, no one should notice. But when they are done poorly, they can wreak havoc on the business, especially during times like these.
Brands can no longer afford to leave such an important consideration to a far-off silo. Find an expert to guide you, or a trusted partner who’s reliable and able to flexibly ship your products where they’re needed. Make sure you’re supporting your team and building their loyalty for a long haul, in which real-time decision-making will be of the essence. And realize that your brand is depending on you. If your products arrive on time and intact, you may be well on your way to winning the holidays.
Brian Birch is chief supply chain officer with Netrush.