The pandemic was the catalyst to a chain of events that have caused ecommerce businesses to experience the highest of highs and lowest of lows. Online shopping volume is at an all-time high, and ecommerce stores have boomed since 2020. But many online retailers are struggling to secure products, packaging, and materials to keep up with recent growth.
Keeping a lean inventory has been a common practice in the past. But with today’s volatile supply and demand, inventory needs have been changing faster than supply chains can adjust. This shift has led to massive shortages in almost everything, making it challenging for online retailers to keep their items stocked and meet customer expectations for speedy deliveries.
Having a successful online store in 2022 means dealing with current supply chain issues, managing customer expectations, and finding alternative suppliers.
What’s going on with the supply chain?
It’s no secret that the pandemic has caused severe disruptions in almost everything that we do, including buying and selling online. When social distancing regulations became widely enforced, consumers turned to online stores for their wants and needs. Online sales went up over 30% in 2020, which many experts thought was a fluke. But ecommerce sales continued to climb an additional 40% in 2021 even though social distancing regulations around the world were limited.
Despite the rising success of online retailers, supply chain issues have caused several problems for merchants and suppliers, eventually trickling down to consumers. Many major manufacturing and industrial complexes were hit hard by the pandemic. The virus infected many workers, causing lockdowns and disruptions in production. Eventually, raw materials and products became scarce, causing prices to go up across the board.
At the same time, people were spending more time indoors, working from home, attending virtual events, and even learning online. People around the world suddenly needed different products and services and new ways to earn an income due to massive layoffs and business closures.
The digital transformation began to sweep through every market and industry. More people found ways to capitalize on retail ecommerce sales, SaaS, and subscription-based services. And even though many suffered from decreased income, payment technologies like digital payments and Buy Now, Pay Later made it easier than ever for products to be bought and sold online.
Unfortunately, the combination of increased demand, limited supplies, and a limited workforce has led to worldwide supply chain issues that affect almost every industry.
Running an ecommerce business despite supply chain setbacks
While supply chain disruptions have created numerous setbacks for ecommerce retailers, many have found ways to reduce problems that cause customer churn and thrive during these difficult economic times. Here are four ways that your ecommerce business can deal with current supply chain issues:
1. Watch your inventory closely
It can be tough to anticipate inventory needs in an evolving marketplace. It’s always been essential to keep track of your inventory in a stable economy, but now it is necessary. Ecommerce retailers must be aware of what is in stock, what’s out, and what is running low so that they can order accordingly and avoid any last-minute surprises or delays.
Retailers should put their resources toward increasing inventory wherever possible. If a product or packing material is in stock, make sure to buy extras so you can have some backup in case of disruptions or sudden demand.
2. Use more efficient tools
The latest ecommerce tools can help you stay on top of your supply chain and plan accordingly. Supply chain management software is widely available, even for smaller ecommerce retailers. Modern tools can help track inventory, manage shipping, and stay up-to-date on any changes as they occur.
To accommodate changing customer expectations, it’s also crucial that ecommerce businesses enable digital payments if you haven’t already. Digitization has taken over more than just businesses, and digital wallets like Apple Pay and Google Pay are becoming increasingly popular. Ensure that you offer your customers several ways to pay so that you don’t miss out on any sales.
3. Be flexible
Products may unexpectedly become unavailable, and supplies can be tough to find. Unpredictability currently plagues supply chains everywhere, so ecommerce businesses must stay flexible. It’s wise to anticipate problems before they happen so that your company can be prepared in case of significant disruption.
Look into alternative materials, products, and suppliers. Consider sourcing locally as a means of bypassing nationwide and global shortages and research alternative products or other services that interest your target customers. Overall, keep a flexible attitude and be open to last-minute outages.
4. Communicate with your customers
For the most part, consumers are aware that supply chain issues are causing their favorite products to be in short supply. Even in an increasingly self-serve environment, it’s still important to be transparent about how these issues will affect your customers.
Explain that orders may be delayed and shipping times may take longer than usual. Set up email reminders so that your customers will be automatically notified when products are back in stock. And keep an eye on the overall user experience with your ecommerce site through surveys and other feedback.
Online businesses need to be prepared for anything in a rapidly changing digital environment. There are many ways that ecommerce retailers can mitigate supply chain issues without compromising on quality or user experience. Use automated tools to help you track inventory so that you never get caught off guard when supplies are low. Increase your inventory whenever possible, and look for alternatives for packing and shipping. Finally, continue to focus on the customer experience. Be upfront and honest with your customers about shortages or shipping delays, integrate numerous payment methods, and incorporate customer support tools to provide the best service possible.