eCommerce Supply Chain Issues 2021
A lot of things happened in the last 2 years under the influence of the global pandemic. The virus caused disruption across industries and reasons that no brand has ever expected or prepared for. The e-commerce industry is lucky enough to witness tremendous growth thanks to people staying home. Yet they still have to adapt to rapid changes within the supply chain. There are challenges but opportunities are also on the way. This article will discuss 4 issues concerning the e-commerce market that every company should be aware of. 1. Material scarcity Insufficient input has been a great concern since the beginning of the pandemic as people crave more household supplies than ever before. Almost two years after the global lockdown, companies, and suppliers are still struggling to meet this demand. This is particularly due to the limited availability of human resources and materials. Some businesses have switched to multi-sourcing in an attempt to fulfill customer needs. However, delay in manufacturing and delivery has made it more difficult to collect a sufficient stock level. Not to mention that the model leads to added costs to the product, as you are transforming away from the single bulk order. Meanwhile, it tightens the competition within and between regions to achieve the best deals possible. Another problem is that constant disruption is inevitable as the pandemic has yet to be under control. Although vaccine campaigns are quickly implemented, it is not enough to bring everything back to normal in such a short time. For example, European countries are facing another lockdown this month after a period of opening due to the effect of the Delta variant. 2. Increasing freight prices The need for container shipping has surged considerably throughout the pandemic. The boom in eCommerce sales possessed greater demands for raw materials and manufactured consumer goods, which are often carried in shipping containers. Since this demand outnumbered what is expected, it left insufficient shipping capability, especially in empty containers. A large number of goods penetrated to the ports also caused serious congestion. The main cause of this is the labor shortage. As of today, the virus has infected more than 192 million people worldwide, among whom 4.3 million could not survive. The virulence is undeniable. Furthermore, social distancing regulations have limited the number of people present in a specific location. Hence, there was never enough labor to promptly load or unload the ship. Because of this congestion, companies are unable to get the products out on time – which means a failure to adhere to its delivery commitment. 3. Changing customer tastes Changes in lifestyle have led to changes in buying behaviour. Firstly, there has been a shift towards online shopping. As people couldn’t go out because of the lockdown and social distancing, the only option is to place an online order. Experts expected that this trend would continue post-pandemic since people come to realize its convenience. At the same time, they have learned to lower their expectations regarding the delivery dates and raise requirements for a positive online experience. Secondly, people tend to approach more valued-based purchasing. This trend can be clearly seen in the fashion industry wherein criticism towards fast-fashion brands has accelerated recently. Consumers want to maximize value for every bit of their spending. This is a great opportunity for sustainable goods and services. A surprising change is named an increased love for the locals. Problems regarding the international supply chain include low delivery, unexpected cancellations, materials shortage, and many more. Therefore, the only way to get a fair delivery duration with a reasonable price is to depend on local businesses. This might pave the way for localization in the retail industry after the pandemic. 4. Digital transformation Digital transformation has been a trend before the pandemic and the global lockdown has rocketed its development. There are several technologies that have the potential to enhance agility across the supply chain including drones and robots, electric vehicles, automation, artificial intelligence, the internet of things, and big data. For example, AI and big data offer analytics and insights into customer behaviour that can facilitate a positive user experience. Because of this ability to predict people’s behaviour, it is widely used to make recommendations tailored to each individual. Though promising, the challenge lies in integrating these technologies into the current supply chain. It takes time and organizational reconstruction to put technology into action. However, it is undoubtedly that this is a must-have move if companies want to stay ahead of the competition. Looking forward to the future The pandemic has reinforced the need for greater supply chain optimization and faster decision-making. That’s why it’s increasingly important for companies to implement automation technology and artificial intelligence in their daily operations. If you’re operating on BigCommerce and Shopify, Atom8 automation could be a good start for your digital transformation. It is an automation platform that allows converting repetitive tasks into workflows that execute based on predetermined rules. The app can be connected with other extensions such as BackOrder, Mailchimp, Klaviyo, Sendgrid, and ShipStation. Once released from the tedious work, you have more time to invest in impactful business activities so that they leverage your performance.
