Business
Are you prepared for the impact of the supply chain crisis?
Global Banking & Finance Review®
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The supply chain crisis, exacerbated by Omicron and Brexit, challenges UK retailers. Effective communication and strategy adaptation are key.
By Justin Taylor, UK MD at Teads
Justin Taylor, UK MD at Teads
Despite many of us coming into this year with an increased sense of optimism, we once again find ourselves ending 2021 full of uncertainty. The explosive arrival of the new Omicron variant has seen rapidly increasing restrictions being placed on the population, with the potential for even tighter laws after Christmas, as infection numbers soar.
For many retailers there is going to be a sense of déjà vu here. Forward-thinking marketers will have built an element of flexibility into their campaigns to allow them to align with ever-shifting sands in these uncertain times. At this late stage, hero ad campaigns have all been rolled out and messaging for many will if not be set in stone, then will at least be hard to change. However, what may have broadsided many is the combined impact that both Covid and other things like Brexit have had on the supply chain: fewer lorry drivers, massive order delays due to reduced staff capacity, and shipping costs hitting the roof.
Adapting to the supply crisis during the festive season
The reality is that the supply chain crisis we’ve been facing has had a significant impact throughout the UK, with manufacturers, consumers, retailers and the economy all affected. To attempt to counter this in the lead up to Christmas, many retailers laid out their festive offerings early to ensure everyone was able to purchase gifts despite the supply chain problems. Consumers have been following suit by gift purchasing earlier this year, with October marking the first rise in retail sales since April.
However, with the Covid clouds gathering and supply chain issues raising their head again, it is creating increased problems for retailers at what is a pivotal time of the year. This means that getting the balance between advertising products and not being able to fulfill orders in a timely manner, if at all, is becoming increasingly challenging. While Christmas, for many, is the biggest time of year for revenue, retailers have to be very wary of the reputational damage that can be done through late delivery or reduced ranges and products being available. According to our own research, in the lead-up to Christmas this year 39% of UK shoppers have experienced their order not turning up, with 35% of those wishing to never use that retailer again following a negative experience.
This means retailers need to not just provide peace of mind about their products and deliveries, but also inspire confidence for consumers. The retailers that fully service customers and keep them updated on changes and delays without overpromising will be the ones that stand out from their competitors into the new year – and keep their reputations intact.
Stay true to long-term objectives
While responding speedily to market changes is critical with their online ad strategies, it can’t be done at the expense of long-term planning in order to build trust with consumers. Retailers can’t forget that loyalty has always been built on great customer service, trust, and flexibility – in this time of disruption and uncertainty it’s essential not to turn your back on these values.
So, how can retailers remain agile with their online advertising strategy in the face of continued uncertainty and change, and yet also stay true to their long-term objectives?
Throughout the pandemic, retailers have had to continually focus on “agility” and their ability to “pivot” on their strategies and messaging, so much so that these terms have become enshrined in the marketing vocabulary of the past 18 months. And the retail sector has probably seen this as much if not more than any other sector – marketers having to switch channels and targeting methods as lockdowns have been imposed and lifted, and consumer confidence has risen and waned with the waves of infections.
Communication is key
As we face this new barrage of challenges, it’s critical that retailers communicate effectively with their customers and wider target audience, this means increasing campaign performance and enhancing campaign effectiveness. Of course, it has become harder to reach and track those audiences with the move away from third-party cookies, and the industry has not as yet been able to implement a full shift to authenticated first-party data solutions.
With ecommerce becoming a more dominant channel for sales as a result of various lockdowns, retailers can take advantage of digital ads to help consumers down the purchasing funnel. Contextual advertising in particular lines up more with consumer values and interests than other forms of advertising. We’re seeing that cookieless solutions are actually delivering better results than their cookie-based counterparts. This makes sense when you think about it, as cookies tell you historical data. But cookieless solutions, such as contextual targeting, is all about the here and now, helping be even more accurate about the precise right time to engage with a user.
It’s vital retailers have a strategy in place to weather the storm. If they can engage with customers in the right way and at the right time, it is still possible to create loyalty long into the future, in spite of the turbulence we’re all living through.
The article discusses the impact of the supply chain crisis on UK retailers, especially during the festive season.
Omicron increases uncertainty and restrictions, complicating retail operations and supply chains.
Retailers should focus on communication, flexibility, and maintaining customer trust to navigate disruptions.
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