Coronavirus: Disrupting Industries, Upending Supply Chains
An eCommerce agency perspective
March 10, 2020
Author: Alexandra Wood
In response to the Coronavirus scare, this week the eCommerce space has seen giants like Adobe and Qualtrics cancel events “after careful consideration…[for] the health and safety of our customers.” Salesforce and SAP have suspended non-essential travel for employees. And, one of the industry’s largest retail shows, Shoptalk, has been moved to September. It can be safely assumed that this will only continue not only within the eCommerce space, but across all industries in the near term; so, what does this mean for eCommerce companies and how can you prepare?
The disruptions of conferences across the country will have sweeping impacts in many industries – hospitality, transportation, and more – but for agencies and brands, specifically, it disrupts a prime opportunity to not only advertise your business, but to network with existing and new partners and brands. While some commerce brands are planning to deliver conference content online – the Adobe’s Summit, for instance, will be hosted as an online experience – many of us rely on conferences to realign, see and understand new trends, meet new contacts and continue fostering relationships.
Today, with more sophisticated collaboration tools, business is better positioned to respond to an event of this nature. It is common for companies and agencies to have some, if not all, of its workforce work remotely at least part of the time. Solutions like video conferencing, Microsoft Teams and Slack, as well as other online tools, enable communication and collaboration among far-flung teams.
As employees and employers embrace working remotely, companies should have clear employee communication plans in place. Additionally, interactions with partners that may traditionally take place in person may need to be hosted remotely. Everyone, brands and agencies alike, may need to make allowances for partner team-members working out of their homes and potential distractions that may arise in doing so consistently.
Breaks in the supply chain
Supply chain disruption is the most significant impact within the eCommerce space. Many brands today manufacture goods in Asia, the most heavily hit geography to date. But as the virus spreads, even those that manufacture within Europe and the Americas will begin to feel the same challenges already arising in Asian manufacturing.
With most planning models, brands likely have three to six months of available inventory based on prevailing forecasts. What this means for consumers and brands – the true impact of manufacturing suspensions or decreased production due to staffing shortages – will not be fully realized until replenishment is expected and cannot be delivered.
With manufacturing concerns at the forefront, the companies best able to respond will be those with sound inventory control capabilities or the ability to pre-emptively carry excess inventory. This will be more readily supported by the brands with core products and fewer seasonal items. More critically, those companies with multiple consumer distribution touch points will be able to react to shifts in fulfillment challenges.
Brands with omni-channel operations or multi-location distribution centers can flex their fulfillment models, at least marginally, to respond to potential impacts of the Coronavirus spread and their ability to fulfill consumer orders. Those with a single distribution channel will need to review their disaster recovery plans in contingency for a fulfillment center shutdown, however remote that may seem.
Brands should take this time to define messaging to consumers should fulfillment delays or even the inability to fulfill – either due to internal challenges or, as we are seeing in Italy, quarantined cities – prevent successful delivery to consumers.
Strategize with your teams on whether you want to accept orders for locations with delivery restrictions today or if you will prevent the purchase completely, clearly communicating this to consumers early in the buying process. As people look to avoid crowds, it is realistic to assume that eCommerce could see an increase in order volume, particularly in household necessities; the ability to communicate about any delays will be as critical to brand protection during this period as with any other service outage impact. Brands should take this time to review disaster recovery plans, multi-location fulfillment strategies, and customer communication messaging for potential future impacts.
Alex has worked in eCommerce for several years supporting large multi-$100M B2C and B2B companies and those just starting out. Today, she leads the Solutions team at LiveArea that can help you architect your solution for now and in the future. When not working you can find her cheering on her sports teams and enjoying good weather with friends on a patio in Dallas.