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Home » Blogs » Think Tank » Three Lessons for Retailers in a Year of Disruption

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Three Lessons for Retailers in a Year of Disruption

October 20, 2021
Krish Iyer, SCB Contributor

After what feels like an endless stream of blockages, delays and natural disasters, it’s time to accept that this state of affairs is now normal for retailers, and adapt accordingly.

Up to now, retailers have reacted to each new disruption as it comes. The goal has been simply to meet current demand and keep the dam from bursting. The limitations of this strategy will only become more apparent and troublesome as we enter the holiday season. It’s time that retailers shifted from a reactive to a proactive strategy, one that anticipates and accounts for all future disruptions.

In considering proactive strategies, it’s important to look to the past for hints about what’s to come. Following are a few of the lessons that retailers have learned in the past year, and what they can expect in the next.

Communicate, communicate, communicate. The key to any good relationship is communication. Retailers and customers alike have felt the effects of the shipping crisis. Because of this, the latter have come to value proactive communication and transparency into the shipping process from retailers.

Customers want to know upfront what they can expect from a retailer in terms of inventory and shipping timing. They expect retailers of all sizes to be able to communicate delivery expectations and potential delays in their product listings. This is especially true for small and medium-sized business. A recent survey conducted by ShippingEasy found 84% of respondents saying that visibility into shipment status is important when shopping with small, local or independent brands.

The lesson for retailers is that customers can be forgiving of a seller that communicates with them before, during, and after the transaction. Relying on the consumer to track an order is no longer acceptable. And for those retailers who are afraid to disclose potential shipping delays in their product listing or cart, they will face the wrath of consumers. This is a trend that’s here to stay.

Convenience is king. When it comes to online shopping, consumers have come to expect a seamless experience from start to finish. Whether they’re getting or getting rid of products, they want to be able to do it at the click of a button. As a result, it becomes more important than ever for sellers to invest in omnichannel capabilities and a frictionless returns process.

Retailers that aren’t working to communicate more effectively with their brick-and-mortar stores will struggle with the omnichannel, as it requires them to know whether their inventory actually exists in-store, and enable ship-from-store logistics. That’s why there’s no better time than right now to begin implementing strategies for improving communication across all channels.

Customers are taking the convenience of the return process into consideration before making a purchase. If there appears to be any friction at all with returns, they’re not hesitating to find a competitor that offers a more convenient solution.

Diversify your shipping and vendor strategies – now. Up to this point, carriers have wanted retailers to consolidate all of their shipping with them, discouraging a strategy of diversification. “The more you shop with us,” they say, “the more you’ll save.” A similar model has been applied to retailers’ vendor strategies. But what happens when all your vendors are supplying products from one area of the world, and a disruption occurs there?

Between global supply chain disruptions and carrier capacity constraints, the days of single sourcing a carrier and vendor are likely over. Retailers are being forced to utilize multiple carriers simply to get pickups or packages out the door.

There’s no reason to expect that supply chain disruptions will be limited to 2021. Inventory scarcity will almost surely extend into 2022. Retailers might not be able to change strategies in time for this holiday season, but they certainly can for the next. In the coming year, we’re likely to see them reevaluating processes and creating new efficiencies. Expect to see an increase in the use of B2B marketplaces as means of sourcing inventory to meet demand.

Krish Iyer is head of industry relations with ShipStation.

Sourcing/Procurement/SRM Supply Chain Security & Risk Mgmt E-Commerce/Omni-Channel Retail

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