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Supply Chain is a Mess

Peter Messana's headshoot
By Peter Messana - CEO

For the last 18 months nothing has been normal, but what is striking me as the biggest surprise is the supply chain problems and what happens to a ‘just-in-time’ supply chain that relies on overseas factories during a pandemic.

I’m not sure what surprises me most, whether it is the fact that I still cannot find Claussen whole pickles in the grocery store, or reading about the cost of a container increasing 600%, or reading of a company that basically has leased a cargo jet all for themselves.

Couple that with a very unscientific survey where two-out-of-four retailers said they were not running Black Friday/Cyber Monday deals due to inventory constraints and you can see there is a mess brewing for the busiest shopping period for online retailers. Not to mention for parents and finding their kids those presents that they put on their Christmas list. (If anyone has an in to getting a Nvidia RTX 3080 card, let me know!)

This year won’t come as a shock to many. Depending on the vertical this may look a lot like last year. Last year saw a huge spike on anything to do with staying at home and getting outdoors, leaving many with no inventory come the fall. This year the low inventory isn’t due to the run on goods but rather the supply chain, which is shifting the impact to cut-and-sew and other highly imported products that have long lead times to odd things like glass shortages. The container ships stuck at sea is not the beginning of the end of the shortage, we are likely in the fifth inning of a slow, drawn out pitchers’ duel.

So what’s the bright side of this and how can retailers cope through the season, one word. Merchandising.

Customers will be shopping for the products they seek, you likely won’t have the exact products. But, how about a good alternative, maybe even a higher priced, higher margin item? Now is the time to make sure that your search is tuned and you are taking inventory stock into account to boost or bias results and you most certainly want to be addressing any zero results searches of popular items and suggesting alternatives.

You will not make every customer happy when you suggest a pair of Adidas over those Nike’s they searched for, but you certainly won’t make any customer happy by showing them no alternatives.

This season will be tough for many and you will never make up for those lost sales for the goods bobbing just outside Long Beach port, but don’t toss the baby out with the bath water, spend some extra time with your search and merchandising strategies.