Consumer demand spike is coming in wake of vaccines. Make sure your supply chain is ready.
The chain of events that shut down much of daily life last March hit us all like a ton of bricks. Among industries, supply chains took an especially hard knock. Even before shutdowns in North America, they struggled to meet demand as factories in China were closed. Then as China was opening back up, demand dropped overnight. When things sort of stabilized and customers were buying again, they were doing so online in greater numbers than vendors could keep up with. It’s been a yearlong scramble. Once a significant portion of the population has been vaccinated, supply chains will deal with yet another hurdle, a demand spike. People will rush to go out again, spend more freely, and buy many of the things they haven’t been lately. The difference this time is supply chains have time to prepare.
Just In Time Won’t Cut It
Just in time inventory was a hallmark of pre-pandemic supply chains, but with a demand spike, even bringing in as much as inventory as they possibly can might not be enough for warehouses to satisfy customers. Those that don’t start stockpiling could discover too late that their competitors have bought up all the inventory or a crucial material vital to their products. Businesses that can’t fill orders don’t hold customers’ loyalty for long.
Manage Customer Expectations
That isn’t to say customers will walk away forever if they can’t get next-day delivery. Most people understand and have gotten used to the fact that wider forces in the world have wreaked havoc on everything and life just isn’t as convenient as it was before COVID-19. There’s always bound to be a certain segment of the public that is impossible to please, but they’ll quickly find that nobody can deliver what they’re demanding.
“It wasn’t that long ago, like peak pandemic, when even Amazon was two to three weeks late on packages,” Bombas co-founder Dave Heath told Glossy. “When the biggest company in the world, that pioneered fast shipping, is delayed, it shows the consumer that this is a universal thing.”
Those problems will persist in a demand spike. What businesses can do is be upfront with their customers. Underpromising and overdelivering goes over better than overpromising and underdelivering. Level with people. If it’s going to take a few days longer for their item to arrive, let them know as soon as you can.
If your customers do have to wait longer for their packages, at least let them know where their items are. Real-time tracking data provides more peace of mind to those awaiting deliveries than no information at all. With cargo tracking and RFID, they can be apprised of when their order shipped out and how close it is to them.
Even better, tracking systems employed by Amazon and UPS let customers know how many stops away their packages are when they’re out for delivery. Studies show that anticipation enhances enjoyment, so getting people excited all over again about their new purchase benefits the seller. For practical purposes, some deliveries require people to be home to sign for them. Believe it or not, there will come a time when we’re out and about again, not sitting on our couches waiting for something to break the monotony.
People hate making phone calls to check the status of something they’ve already paid for. Don’t make them do it.
Supply chains have experienced a great deal of upheaval and made a lot of changes since last March. The pandemic has accelerated the adoption of trends from digitization to automation. E-commerce went from 11% of retail sales in 2019 to nearly 15% in 2020, a figure it wasn’t expected to hit for another two years. There’s no going back now. E-commerce will only continue to pick up steam, so if you don’t have a good platform, you need to get one as quickly as possible.
Border crossings will get easier as vaccinations mount and restrictions ease. By now, companies interested in doing so have shortened their supply chains or moved them out of China. Market assessors are already predicting a demand spike for celebratory items such as wine as we put a terrible time behind us and have all the get-togethers we couldn’t during the pandemic. The next year could see the rise of a new Roaring ’20s, and consumers will be looking to spend. Make sure your supply chain can handle it.