Overcome Supply Chain Disruptions Using These Strategies
Jun 21 2022
Since March 2020, the global supply chain has been in a state of flux. This far-reaching and complex system affects so many aspects of our daily lives that consumers have reprioritized what they look for when making purchases, including where they go to find what they need.
The delicate balance of depleted supply and increasing demand puts marketing professionals in an interesting position: how does one attract new customers and retain current customers without a consistently reliable supply of goods?
Although we’re now seeing improvements in item availability and steadier inventory, some industries are still reeling. Most notably, the automotive and retail industries struggled due to the connection with manufacturing shortages (in regards to both materials and labor). Below are a few of the ongoing challenges.
1. Evolving purchase priorities
When supply chain issues began their widespread impact in mid-2020, people accustomed to selecting products based on price and preference suddenly didn’t have the luxury of choice. More options have returned, but priorities have shifted to what’s available via “delivery and curbside pickup, with emphasis on speed and accuracy.” Consumer trends indicated that during the summer of 2021, only 13% of people who encountered out-of-stock items (which happened to over 60% of consumers) waited for the item to be restocked before purchasing. More than 70% went as far as to switch retailers or brands entirely.
2. Measuring customer engagement
McKinsey reported online sales figures “rising by about 35 percent year over year, and online penetration remains about 30 percent higher than pre-COVID-19 levels” from March through August 2021. Given ecommerce’s continued growth, digital marketers can’t rely as much on in-store purchases when creating campaign goals. Metrics like product page views or items added to online carts offer a better picture of today’s consumer trends.
Maximize Your Budget with the Right Methods
The unpredictable supply chain caused many businesses to reevaluate their marketing and ad spend; after all, why spend money marketing items you don’t have? However, maintaining a consistent online presence through strategic spending is imperative to capitalizing on ecommerce.
Consistent message delivery
Pausing paid campaigns has short- and long-term consequences.
- Short term: lose the opportunity to build brand awareness and experiment with messaging that openly addresses current inventory challenges.
- Long term: paused campaigns result in less reliable performance data. Campaigns that aren’t acquiring customer insights (a.k.a. increasingly valuable first-party data) can set you further back than if you’d kept the campaign on.
Pause with purpose: remove or pause out-of-stock and low-inventory product ads and direct spending to in-stock items. If you must pause product-specific campaigns, adjust your budget so awareness campaigns can keep running.
Speaking of first-party data: social listening helps you discover what people are saying about your company as well as their expectations. Listening to social conversations and analyzing the intent behind them can reveal the details you need to craft the right message, design a campaign that resonates, and invest in platforms where your audience is active.
Sprout Social finds that social listening can specifically help brands in five important areas: brand health, industry insight, competitive analysis, campaign analysis and event monitoring. Brand health and campaign analysis in particular provide useful insights as to rework messaging in the face of limited inventory or shipping delays.
CTV ads are a cost-effective way to reach a target audience while gathering relevant performance data to inform future campaigns. Used in a far-reaching awareness campaign, CTV ads can help to keep brands front-of-mind even when experiencing inventory challenges. Compared to traditional TV ads, CTV offers more ways to understand its true impact and monetary value:
- More strategic targeting options
- Better attribution and ROI measure
- More control over where ads appear and when
As more people move away from traditional TV-viewing in favor of streaming content across multiple devices, CTV ad spend will continue to be relevant even when the global supply chain has righted itself.
Work with the Right Resources
Resisting the impulse to cut back on marketing spend in lean times can yield positive results. For example, Coca-Cola opted to cut back on advertising in July 2020 because they anticipated little to no returns due to the supply chain and COVID lockdown. However, PepsiCo increased spending and yielded a 5% increase in net revenue; Coca-Cola experienced an 11% decrease.
CTV has proven to be a smart investment for awareness and engagement. A 2021 Innovid study of over 550 advertisers had several promising findings:
- Global CTV impressions in 2020 increased 60% YOY
- CTV made up 40% of all video impressions
- Interactive CTV ads averaged a completion rate greater than 85%
Further, Digiday and Innovid surveyed over 100 brand marketers and executives to find how shifting to CTV ads impacted their revenue and found, “Of the marketers who have shifted strategy and have confidently assessed their outcomes, a majority of respondents (39%) have seen an increase in ROAS.”
General Motors is one example of a company successfully implementing CTV tactics. Prior to the pandemic, they invested in interactive TV spots for their high-end brands that allowed consumers to “browse different interior features of a vehicle, change the colors of the vehicle on screen and book a test drive” — essentially, many of the experiences customers wanted during COVID lockdown. Even when supply chain snags are out of your control, strategic digital marketing decisions aren’t.