Ecommerce Experts Share 4 Ways To Tackle Supply Chain Issues

Since the pandemic started, about one-third of shoppers have expressed unhappy experiences with shipping delays. Overly busied ports and lack of resources, price hikes in freight costs, and labor costs are among the many problems plaguing the ecommerce industry.

As Ashley Scorpio, VP of Partnerships at Hawke Media shared with us, “Brands aren’t able to get the resources needed to manufacture their products and create the “for the market” offering at the same speed and reliability that they were before. In a similar vein, there are unpredictable delays in shipping (both to the merchants and to shoppers) that are causing a lot of frustration. Even when these things are out of the control of the merchants, the frustration of shoppers is being taken out on the merchants via things like negative reviews, negative social media comments/posts, increased returns, etc. 

Jordan Taormina, Director of Strategic Partnerships at The Snow Agency mentioned a similar sentiment. “The most common scenarios we've seen are elevated freight costs for both air and vessel importing and significantly delayed times due to bottlenecks at ports.” 

What should ecommerce and DTC operators do to minimize losses due to supply chain problems?

“The most common scenario we've seen across our clients in response to the supply chain crisis is to raise prices. Some of these price increases may be necessitated by rising inflation, but others help tamp demand due to limited supply.”  - Mike Belasco, CEO at Inflow

Raise prices. It’s the most straightforward way to deal with this crisis. And quite an obvious tactic. However, raising prices could lead to other issues especially if the extra costs are passed on to consumers—cue bands of unhappy humans. (Not a great sight.)  

Consumers these days also have increasingly high expectations for frictionless fulfillment, and that includes fast shipping and frill-free returns. That is regardless of the supply chain conditions affecting your operation. 

It also goes without saying that if your brand is not dealing with supply chain problems properly, it could easily lead to negative WOM and brand sentiment.

So we’ve gone and gathered some feasible tips from experts to help you find alternatives to deal with supply chain problems and manage customer satisfaction. 

1. Get creative

Weighted blanket brand Bearaby offered a cheeky mea culpa to the customers whose orders were unexpectedly delayed during the holiday season. While their blanket was en route, Bearaby delivered a knitted stress ball, called the Hugget, to customers. Hugget came with a note that said, “I was born with the mission to bring you a little comfort. When I heard that you might need some extra love, while you are waiting for your blanket, I simply couldn’t wait to be woven in.”

It was particularly in line with relieving stress and the uncertainty brought about by delayed shipment. And it worked in the favor of Bearaby because their brand advocated for their products to bring about calm and relaxation.  

Reinforced by what Ashley, VP of Partnerships at Hawke Media shared with us, “one of the best ways we’ve seen companies deal with these issues is by getting creative with ways to appease their buyers to combat the negativity brought on by uncertainty and delays. This has included things like discounts and free offers on future orders, shipping cost refunds, discounts to purchase out-of-stock items in the future, and more. Brands that are taking a difficult situation and turning it into a moment to develop their customer experience are finding ways to improve the perception of their brand.” 

2. Overcommunicate with your customers

"People want information and the ability to know you are being straight with them. So if there is going to be a delay, tell them as soon as you can that there is a delay." - Jason Ciment, Principal at Get Visible Inc

Any consumer would want to receive their items fast. But they would also want the reassurance and ability to check when their orders would arrive. Meaning they want the breakdown of their entire delivery cycle readily available. If you have already set the expectations of your delivery commitment either on your website or in your transactional emails, all the more your consumers would want real-time visibility of their order status.

"This is outstanding customer service. Don’t wait for them to call to ask about the status. Give them a heads up and pre-empt the call. You can then read the situation and decide if you need to sweeten the pot," shared Jason.

Communication with your customers is key at this phase. A report stated that consumers are likely to accommodate shipping delays if retailers communicate with them. Thirty-six percent of respondents said they experienced substantial delays, but only 19% of them were well-informed by retailers. Ecommerce operators should be mindful that customers appreciate being notified, this is especially so with queries regarding order status and delivery time. If not handled well, it may easily lead to customer frustration and a bad customer experience. 

Pet brand Fable also faced supply chain issues in 2021 with a spike in demand largely driven by consumers looking for companionship at home. While the team was working on meeting the volume of demand, its marketing team attempted to manage and navigate the situation by providing consumers with frequent updates on the supply chain and educating them on the factors causing the delay. For instance, if shoppers signed up for Fable’s waitlist, they were periodically given updates via email.

“The best thing to do with any known product delays is to communicate this to your customer. When you know the expected product delivery date, you can state it on your product page and allow the purchase. If product availability is less known, have an opt-in option for a back-in-stock alert,” says Michael Melen, Co-Founder at SmartSites.

“Once you have the user’s email (and/or SMS and/or Facebook Messenger), you can get creative with your communication. Use these direct channels to communicate your brand’s values and keep the user engaged until the product is available again. Depending on your niche and product catalog, you may have similar products that the user may purchase.”

Monica Bansal, Head Of Marketing at Hustler Marketing shared an interesting case study with us. “As an ecommerce email marketing agency, we work with a number of ecommerce stores that have faced and still face the supply chain issue, especially just before the holidays last year. We were told that due to the shipping issues from overseas and ships being logjammed en route, a few of our clients had to deal with shipping delays and even shipping unavailability. Since most of these issues were not something the stores could help with, we started factoring those restrictions within the content of the email campaigns. 

Our main focus has been offering transparency around these issues and one of the steps we took for stores that imported products from overseas was to add a small footnote in each email about how "Shipping could take 15-20 extra days" and link that to an article explaining the issue. For another store, they offered their customers an option to either wait longer for the products at regular or free shipping or pay extra so the stores could get the products flown in instead of ocean freight shipping, which obviously costs a lot more.

Another marketing step we took for American manufacturers was to create campaigns around it and highlight the "Proudly Made In the USA" feature to stand out from the rest.” 

The following is an example of a plain text email that one of their clients wrote and sent out to their email list explaining the situation. 

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The email below was something that the Hustler Marketing team created for their client to communicate with their customers when the supply shortage issue was fixed.

3. Keep an eye on your inventory levels and demand

In any retail business, you need to manage and balance your stocks well. Being understocked means lost business opportunities. It’s a known fact that maintaining an updated inventory is one of the toughest tasks while running an ecommerce business since it heavily affects profit and loss. Low inventory levels may lead to a lack of stocks when customers try to order, hence benefiting your competitor. 

“It is critical that brands stock inventory for more than six months at any given time to avoid having to import costly shipments via air and also to ensure you never deplete the stock of your best products. There's no better way to destroy momentum for a brand than going out of stock and having to shut off ads. Many of your consumers may end up shopping with your competitor if this ever happens,” says Jordan Taormina, Director of Strategic Partnerships at The Snow Agency.

Managing a preorder list is also at the top of what ecommerce business look to do, to keep a close eye on the availability of their stock. According to Jason Ciment, Principal at Get Visible Inc, some of his clients offer the preorder situation to customers and are constantly taking up to 14 weeks in advance.

4. Negotiate terms with your suppliers

Jordan Taormina mentioned that ecommerce brands should “focus on the cash conversion cycle and negotiating terms with your suppliers. If you have a track record and positive relationship with your manufacturer, they are more likely to negotiate payment terms and flexibility to have inventory ready for you at all times which cuts down on turnaround time for new inventory POs. The closer to zero your cash conversion cycle is, the better. This means that you should try and pay minimal deposits and push out remaining payments on inventory as far as reasonably possible.”

Not gone so soon—unfortunately

It’s a fact that supply chain disruptions are here to stay, at least till 2023 in the foreseeable future. Brands need to be actively looking at ways outside of raising prices to maneuver the situation at hand until things get better. 

Samir Balwani, CEO at QRY shared an interesting way to look at these issues and how to take advantage of its opportunities. “Supply chain issues are impacting everyone but at different times. When you see a competitors' hero product is out of stock, but you have inventory, take advantage of their demand and use it as an opportunity to convert their customers to yours. We've seen the most success in paid search and on retail media, but depending on the size of your campaigns you could extend this strategy into paid social and programmatic display too.”

Other strategies to curb shortage could also include turning to domestic manufacturers as a temporary solution. However, the abovementioned strategies are not foolproof and they may not work for some brands as well as they do for others. Ecommerce brands need to weigh out the pros and cons of these alternatives and find what best fits them to tackle the problem in a quick and effective manner without affecting their brand too much.

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