The world is experiencing supply chain shortages across multiple industries, largely caused by logistical interruptions due to the shutdowns caused by the pandemic. Employees in countries that were most heavily hit were unable to work, factories were without the supplies they needed to make products, and now that they are back in production, cargo ships are unable to unload, and to top it all off, there are fewer truck drivers available to move the merchandise that does manage to be unloaded. Are these supply chain shortages now damaging your brand’s customer experience?
Headlines Reflect Supply Chain Problems
Over the past few months, virtually every industry has seen increasingly alarming supply chain shortages, which now threaten the holiday shopping season. Food, toys, tools, alcohol — anything that originated overseas, have been affected. Among the recent headlines in the last two weeks:
Between the lack of places for cargo ships to dock, and a shortage of truck drivers, experts are saying that it is going to get worse before it gets better and that we could continue to see shortages until 2023. So how is it affecting consumers?
Buy Now or Pay Later
Again, we can turn to the headlines to see how retailers are urging customers to buy now or regret it later when the shelves are even barer:
Customers are beginning to feel anxiety about supply chain shortages and not being able to easily buy what they want from retail outlets. A recent poll by GoBankingRates indicated that 44% of consumers said that they are feeling stress or anxiety while shopping because they are not able to find the items they need, and 62% are worried that out-of-stock items will disrupt their plans for the future. Additionally, 82% of those polled said that they believe that supply change disruptions, as a whole, will negatively impact future birthdays, holidays, or travel.
Even online shopping has been impacted. In June, tech giant Amazon had problems keeping up with demand during its Amazon Prime Day because of supply chain disruptions, something that is very likely to occur again during the holiday shopping season. Amazon is announcing Black Friday deals early, in October, to encourage customers to begin their holiday shopping now rather than waiting until the end of November.
Supply chain disruptions are affecting every aspect of the business world, from product suppliers to factory workers to consumers to retail marketers. Julio Lopez, director of retail at Movable Ink, a leading personalized marketing software platform provider, told CMSWire that it’s important for brands to alleviate the concerns of customers by creating seamless experiences that drive repeat purchases and enable the brand to remain competitive. “They must make product discovery/evaluation quicker, inform buyers of relevant product details, and offer a range of convenient fulfillment options.” Other aspects of the customer journey that remain extremely important during this crisis include being open, honest, and catering to each customer specifically through hyper-personalization. “Retail marketers can meet customers’ new value expectations through more transparent and personalized promo strategies or convenient payment options (such as Buy Now Pay Later),” Lopez explained.
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Why Is Supply Chain Disruption Happening Now?
There are actually multiple variables involved with the supply chain shortages that are occurring: a shortage of truckers and cargo ships that are not able to get where they are going and back again, and for those that do, vastly increasing shipping costs. As always, scarcity drives inflation, which is something else that is now being felt by consumers. On October 11th, California’s Marine Exchange revealed that there are currently 61 container ships anchored and 25 at berth in the areas between Los Angeles and Long Beach.
Deborah Weinswig, Coresight Research Founder and CEO, said in an interview on Yahoo Finance that we are currently dealing with a complete container misalignment, and in Coresight’s opinion, it will likely be Q1 2023 before it is realigned.
A report from Moody’s Analytics on Monday, October 11th pointed to differences in how countries are dealing with the COVID-19 pandemic, as China’s goal is zero cases and the United States tends to view COVID as an endemic disease. Moody’s also pointed out how there is no concerted global plan to guarantee the smooth operation of the global logistics and transportation system. Additionally, the analytics firm stated that the “weakest link” is the shortage of truck drivers, which has greatly contributed to port congestion and gas shortages.
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How Can Brands Improve Customer Experience During This Crisis?
Aside from prioritizing their own core products and services, brands are encouraging customers to start their holiday shopping immediately, in order to avoid the coming bottleneck that will come from high demand, a limited supply, truck driver and worker shortages, and still-congested ports.
Joe Silverman, CEO of New York Computer Help, a computer repair center supporting 30,000+ NYC users, reiterated the seriousness of supply chain shortages. “Supply chain shortages have been the worst that we’ve seen within the last 2 decades of our operations. It’s not just that the lead times are long, but suppliers that used to have high levels of QA are now trying to sell subpar computer parts. As such, we had to perform a round of due diligence to seek out new suppliers for our customers,” he said.
Silverman said that he recognized that initially, customers were upset, but it was vitally important that his business didn’t pass off any defective products to his customers, so he went out of his way to ensure they were well taken care of. “When this first happened at the beginning of COVID, surely, our customers were not happy with the longer turn-around times. And if parts were defective, we certainly didn’t pass them along to our customers. We reordered from different suppliers and provided accommodations for customers, such as free laptop loaners while waiting longer.”
Stay as Proactive as Possible to Keep Customers Happy
Silverman’s business was proactive in making sure that supply chain disruptions in the future did not impact his customers. “To prevent future delays, we have ordered bulk supplies for regular parts we use,” Silverman said. He explained that it’s also ideal to consolidate to fewer vendors. “That way, we are able to press our vendors for accountability, knowing current issues may lead to a short-lived relationship. Also, we prefer to go local for parts for quicker turnarounds although margins may be lower for the sake of a more positive customer experience.”
It’s even more important for brands to remain agile, be able to react quickly, and continue to provide customers with an exceptional omnichannel experience. “During the ongoing disruption within their supply chains, marketers must remain agile and react rapidly to the operational challenges from a shifting landscape through content powered by 1:1, automated data via data sources that connect experiences across channels,” suggested Lopez.
Supply chain disruptions have affected every industry across the globe, even as consumer demands and expectations continue to increase. Brands must continue to provide a consistent experience to customers throughout their journey, remain flexible and agile in their response to such disruptions, and go out of their way to keep the customer fulfilled, happy, and loyal.