As global supply chains struggle to absorb the impact of war and a pandemic, brands are spending more time trying to get products on shelves. Could using data more effectively be a silver bullet?
The global supply chain is in chaos and it’s getting worse. In fact, the Office for National Statistics (UK) found that activity in the automotive sector fell 0.4% on the month, driven by a 5.4% drop in the manufacture of transport equipment and a 4.3% fall in computer, electronic and optical products. Global port congestion is at a record high of 14.1% of the total fleet.
Where once managing a supply chain used to involve 80 percent dealing with predictability and 20 percent coping with surprises, those numbers have now flipped. The interconnected nature of global supply chains was one of its strengths, which allowed goods to be made all over the world and then shipped and assembled in a third place. But this interconnectedness also makes it very fragile. COVID has already stressed the global supply chain and, although shoots of recovery were evident, the war in Ukraine has thrown much of into disarray again. When one part of that network is no longer available or disrupted, the entire chain buckles.
1. Use data to get better visibility around bottlenecks
However, modern innovations in supply chain management have embraced data. There are public and private datasets available which can be combined to provide a better view for all involved in the supply chain. Now we can see where bottlenecks occur, where the chain is broken or an alternative needs to be found, and whether goods are moving or not. Technology and data has allowed for brands to understand how long before their products will hit the shelves.
But this then poses a challenge for marketers. In the absence of getting enough products on shelves, should they continue with their marketing or pause? Continuing could mean sending consumers to stores only for them to be disappointed. Pausing could mean that their competitors overtake them in terms of consideration and mental availability.
2. Brands shouldn’t scale back marketing activity if possible
Though it is tempting to pause marketing, other global events like recessions have demonstrated that brands that spend during this period, where the logic would be that consumers will not be spending, grow during and after the event. So during this supply chain crisis, marketers need to determine how effectively to keep selling those products that are on the shelf and also maintain awareness of their brand generally.
Brands should not scale back on their marketing activity, as this will give competitors the chance to overshadow them. Once normalcy has resumed to supply chains, it will be difficult to compete with those that continued their marketing activity. Brands should have their long-term goals in sight – in the short-term, marketers will face some challenges as a result of the supply chain crisis, but at some point, this chaos will be resolved. Therefore, brands should stick to their long term goals to maintain or even grow their position in the market.
3. Embrace data to make better channel choices
With the available data on where goods are in the supply chain, predictive analytics has already been deployed to forecast when goods will hit the shelf. Companies such as IBM and Oracle have been doing this with proprietary data, but combining with open source information can produce more accurate results. This information for marketers could be a useful source of information, allowing them to understand how to pace their marketing depending on when goods will arrive in the market.
Taking these supply chain analytics and combining with the demand side, from the customer analytics brands conduct with their internal data can help understand where goods are and what customers want.
4. Prioritise smart targeting
To match the needs of customers to the supply of products, the adoption of a multi-channel marketing approach could prove beneficial. A brand may consider scaling back advertising to just promote brand awareness and to communicate with customers to stay top of mind so that they stay ahead of their competitors. However, they can use more targeted channels such as CRM and Digital marketing to target audiences in the market looking for the products that they already have in store.
Automotive brands unable to get parts to produce for their next generation models, should look to digital channels to target individuals who want or need a car now and don’t mind buying cars already in stock, even if a newer model may be available in a couple of months. Other brands who may also have a shortage of their full product range, should also adopt the strategy of targeting those in the market and ready to purchase the products they have, and focus their marketing budgets on activating and converting those customers.
5. Manage customer expectations
Inventory data and shipping forecast data, coupled with supply chain simulation software can also be used to manage customer expectations. A brand can use this information in their e-commerce channels to help customers understand when the next shipment of goods is likely to arrive in store, and how quickly the current stock is being depleted to give them an understanding of immediate urgency but also long term planning.
Social media channels and customer services can also play a critical role in managing customer experience. Brands can equip their social media and customer service teams with the right supply chain data and this can be used proactively or reactively to manage customer expectations and complaints. Any chance to use internal data, be that product or inventory, will ease some of the pain of the supply chain crisis.
As shocks to the supply chain continue and with the fragile nature of its interconnectedness, global events – either natural or political – can disrupt the entire chain and leave containers stuck in shipping ports or having to find longer routes to destinations. Using data to understand what that impact is can help brands plan their marketing better by utilising different marketing channels to maintain a competitive advantage in the long term, manage customer expectations in the short term, and sell products they have on the shelf.