The Covid-19 pandemic has forced businesses in every industry to change their operating model . Commerce brands have had to introduce extreme measures to ensure they can cope with additional stock levels, while also adapting to a volatile supply chain.
The virus has wreaked havoc on the events calendar, with large and small companies having to overhaul their strategies, either rescheduling for later in the year or going virtual. Here, digitally savvy giants like Adobe and Qualtrics have stolen a march on competition and provided free, online services to keep their user base engaged.
The biggest concern in eCommerce, however, has been interference to supply chains and distribution centres. The pandemic has shown the vulnerabilities in manufacturing and transport patterns in a way that hasn’t been evident since WWII.
It has affected all sectors, from apparel, toys and cosmetics, to construction, healthcare and technology. In the short term, sourcing the necessary supplies to meet changing demand (home gym equipment, jigsaw puzzles, and of course, toilet paper) has proved nigh impossible. Long term, we could see manufacturing operations become more local, and yet more investment in automation and predictive technologies.
Such discussions have spread alongside the spread of Covid-19. So, what could eCommerce companies have done to ensure they are prepared? With manufacturing concerns at the forefront, the companies best able to respond have been those with sound inventory control capabilities or the ability to pre-emptively carry excess inventory.
The disruptions to conferences across the globe have had sweeping impacts in many industries—hospitality, transportation, and more. For agencies and brands specifically, it has disrupted a prime opportunity not only to advertise your business but to network with existing and new partners and brands. While many commerce brands have moved their conferences online—the Adobe’s Summit, for instance, will be hosted as an online experience—many of us rely on conferences to realign, see and understand new trends, meet new contacts and continue fostering relationships.
Remote working as the norm
Today, with more sophisticated collaboration tools, business is better positioned to respond to an event of this nature. It is common for companies and agencies to have some, if not all, of its workforce work remotely at least part of the time. Solutions like video conferencing, Microsoft Teams and Slack, as well as other online tools, enable communication and collaboration amongst far-flung teams.
As businesses have been pushed to embrace remote working as the norm, they have had to have clear employee communication plans in place. Additionally, for interactions with partners that may traditionally take place in person, business professionals have needed to carry them remotely. Everyone, brands and agencies alike, has needed to make allowances for partner team-members working out of their homes and potential distractions that are likely to arise in doing so consistently.
Supply chain disruptions
Breaks in the supply chain are the most significant impact within the ecommerce space. Many brands today manufacture goods in Asia, the most heavily hit geography to date. But as the virus spread, even those that manufacture within Europe and the Americas have felt the same challenges which initially arose in Asian manufacturing.
With most planning models, brands likely have three to six months of available inventory based on prevailing forecasts. What this means for consumers and brands—the true impact of manufacturing suspensions or decreased production due to staffing shortages—will not be fully realised until replenishments are expected and cannot be delivered.
With manufacturing concerns at the forefront, the companies best able to respond will be those with sound inventory control capabilities or the ability to pre-emptively carry excess inventory. Brand manufacturers that provide core products but few seasonal items will more readily support such efforts. More critically, those companies with multiple consumer distribution touchpoints will be able to react to shifts in fulfilment challenges.
Benefitting from fulfilment capabilities
Before the pandemic, the route to purchase was multi-channel, with the traditionally linear route to purchase becoming extinct. With in-store and out-of-home advertising essentially removed as viable options, marketing and the concept of ‘omnichannel’ has been disrupted, maybe only in the short term, yet again.
The brands with omnichannel operations or multi-location distribution centres have been able to flex their fulfilment model, at least marginally, to respond to the impacts of the coronavirus spread and their ability to fulfil consumer orders. Those with a single distribution channel have had to review their disaster recovery plans in contingency for a fulfilment centre shutdown, however remote that may seem.
Brands should take this time to define messaging to consumers should fulfilment delays or even the inability to fulfil—either due to internal challenges or quarantined cities—prevent successful delivery to consumers. Strategize with your teams on whether you want to accept orders for locations with delivery restrictions today or if you will prevent the purchase completely, clearly communicating this to consumers early in the buying process.
With the lockdown coming into force, many businesses have closed their doors for the foreseeable future. The best-case scenario has been to operate digital channels as they normally would with a remote workforce, catering for consumers who have moved to eCommerce to stock up on household staples. The way businesses respond around potential delays has been of critical importance to a brands’ image, as has been the case with other service outages in the past. Now has been an important time to review crisis management plans, fulfilment strategies and communications plans for potential future impacts.
The pandemic has caused countless challenges for supply chains, warehousing and fulfilment logistics within eCommerce, and has underlined the importance of coping with heightened demand in times of uncertainty. But it has also been a sign to key decisionmakers on the need to fully embrace eCommerce. This is the catalyst for change, to make structural business changes, with less friction from others within the business. Drastic actions like the closure of shops is now a necessity rather than an option, and it’s the chance for traditional brick-and mortar retailers to pivot and focus on digital experiences, supply chains and fulfilment efficiencies.
Alexandra Wood is Director of Solutions, LiveArea