The current retail landscape is facing supply chain issues that many of us have not seenin our lifetimes. There are several factors that let us to this moment. In this post, we will cover those issues and, more importantly, offer you tips on mitigating the effects of supply chain challenges and thriving in the current retail landscape.
The Pandemic and the Supply Chain
In short, the overarching reason for such widespread global supply chain disruption stems from the COVID-19 pandemic and the way it effects global economies. Often, supply chain disruptions are isolated occurrences that can be pinpointed, such as natural disasters, strikes, equipment failures, and the like.
Pandemics are different.
Global pandemics disrupt the labor force across all aspects of the supply chain for the entire planet. Just as an actual chain is only as strong as its weakest link, pandemics weaken every link in the supply chain. While recovery in one or two areas of the supply chain, such as materials acquisition or port congestion, can be beneficial, other weakened links, like manufacturing and spikes in gas prices, can still undermine the integrity of the chain.
How Retailers Can Balance Supply Chain Issues and Customer Expectations
Supply chain issues are uncomfortable for everyone. While customers may understand the difficulty, they still want/need their goods and services. Retailers unable to meet customer demands—even given the widely-publicized supply chain environment—run the risk of losing those customers to other retailers that can meet those demands.
Here are several ways retailers can put supply chain management practices in place to maintain—or even grow—their customer base.
Diversify Your Supplier Base
If your current supplier can’t deliver your goods to you, look at which other suppliers can offer what you need. You might be able to identify suppliers in other geographic locations that can help you out when you need them. Having a backup plan is smart.
Conduct an Inventory Audit
It’s important to keep track of your inventory at any given time, but it’s especially critical when your supply chain is interrupted. You may want to consider conducting a comprehensive inventory audit of the products you have on hand and decide which can serve as acceptable substitutions for other products when supply shortages come up.
Liquidity Can Be Critical
Cash is king. Always has been. Always will be. A solid way to protect your business is with flexible access to capital. Having cash on hand is very often the difference between meeting customer demand and going out of stock. With supply chain instability expected to continue for the foreseeable future, it would be wise to consider a flexible line of credit that you can use to procure evergreen or high-demand seasonal items.
Maintain Open and Honest Communication with Customers
Despite customer awareness of supply chain issues, it’s still not clear for many customers just how these issues can (and will) impact their daily lives. Business owners must be even more diligent in their communications to best manage customer expectations.
Being open and honest with customers is critical in navigating the current supply chain landscape. When you are transparent regarding shipping delays, as well as reasons for them, your customers are more likely to show patience and understanding.
This extends to retailers who also sell online, as well. This means keeping your inventory current to ensure your customers see messages letting them know when products are in short supply or on back order. If you can have these messages updated in real time, all the better.
Be Patient
One of the best ways to handle supply chain disruptions is to exercise some patience. Keep a level head and avoid making hasty decisions. Focus on strategies and tactics that build stronger relationships with your suppliers and customers alike.
In Conclusion
The COVID-19 pandemic has been a challenge for businesses worldwide, including those in retail. As we navigate this new reality, it’s important to remember that being prepared is the first step toward success. By taking proactive measures to address predictable customer demands before a crisis hits, retailers can better prepare themselves for future demand going forward.