Supply chain shortages to continue in 2022: How to manage and respond
Supply chain shortage was the biggest challenge for retailers in 2021.
In fact, Salesforce data revealed that inflation persisted throughout the entire holiday season with prices up by 25% in the US YoY, while inventory shrank by 2% as compared to 2020 because of supply chain disruptions.
With the dawn of 2022, the omicron variant has again stirred panic amongst retailers. Another series of lockdowns may impact supply chain management harder. So, there is a strong likelihood that we are looking towards another year of supply chain shortages.
Having said that, the record-breaking sales on the 2021 holiday season despite high prices and inflation is a welcome sign that promises digital sales growth for this year too. But the catch lies in understanding the supply chain management better and strategizing accordingly.
So, to keep you en garde, we are sharing a few ways you can handle supply chain shortages to abate their impact on your Shopify store. Read on!
4 Ways to handle supply chain shortages
Good inventory management is vital for a good customer experience. You would not want your customer to get frustrated when they find out the items they ordered are out of stock.
Likewise, you also do not want to end up overstocking goods.
Hence a good inventory management tool is essential to optimize your inventory to ensure that you have the right amount of products at the right time.
These tools automate processes and provide up-to-date information with perfect synchronizations with warehouses and manufacturers.
Remember that supply chains with good visibility of demands and clear communication can survive the oversupply and shortages crisis in 2022.
Inform your customers in advance
Retailers that display and market their accurate inventory across their network always stay on top.
An updated inventory will clear any confusion about product availability among the customers. So, it is a wise idea to keep your customers abreast of shortages, shipping delays, and non-availability.
You can create a notice on every page of your online store informing about delays in production or shortage so that they can stay ahead.
You can also create order status and send them via email so that customers can know which stage of the fulfillment process the ordered product is in. Also, ensure that customers can find the tracking information readily available.
Adjust your product pricing
With the rising inflation, it is essential to adjust your selling price to meet up the supply chain cost. Last year, retailers and manufacturers paid an additional $223B in the cost of goods and, as a result, prices were up by 20%.
So, review your pricing models and analyze how you set the right price that can please your customer and drive some profit as well.
Assess your fulfillment process to see how you can reduce waste. The lesser wastage, the more is the profit margin. While packaging, invest in good quality boxes and ensure extra cushioning to prevent breaking or spoiling of products.
Also, make sure your storage facility is better to prevent accidents or wastage. In manufacturing also, make it a practice to utilize raw materials to the optimum level and find scope for reusability and recycling.
And most importantly, try to minimize the return of goods for reducing wastage and increase profit margins.
As we have mentioned earlier, inventory management is absolutely crucial to deal with supply chain shortages. Shopify store owners can integrate their store’s inventory with Salesforce CRM to manage inventory without any hassle.
Try out Shopify Made Easy app to effortlessly sync your stores’ data with Salesforce in real-time. Install this free app from Salesforce Appexchange and get started in no time!