According to a Shopify survey of 900 global brands, 66% anticipate that supply chain issues will worsen in 2023 – and these findings are certainly unsurprising, given how consumer behaviours have continued to change over the last year.
From the energy crisis to rising inflation, European brands are facing a host of challenges. With many consumers continuing to tighten their purse strings in response to global economic uncertainties, reduced disposable income and more cautious spending are likely to negatively impact the sale of non-essential items. With this economic uncertainty in mind, brands operating in the retail, FMCG and lifestyle spaces are already beginning to prepare for the 2023 peak season, putting plans in place to meet consumer demand by developing an agile e-commerce strategy. Investing in their e-commerce strategies can help brands regain margin, increase their growth and build greater brand awareness.
The question now is, what steps are brands going to take to ensure that their supply chain is ready for the busiest period of the year?
Meeting the needs and expectations of customers
As consumers battle with the economic challenges at play, they’re shopping around more than usual to find the best deals. According to 2022 data from Insider Intelligence, 71% of global consumers had switched brands at least once in the last year, with respondents citing better deals and better customer service as leading factors in their decision-making.
So, what can brands do to meet their customers’ expectations in a market where brand loyalty is beginning to wane?
Building a customer-first online shopping experience, informed by data insights, is key to acquiring and retaining customers.
Retail, FMCG and lifestyle brands trading on owned e-commerce channels have access to valuable customer data – names, physical addresses, email addresses, the products they like – all of which help brands better understand the people buying their products and their motivations for doing so.
Learning more about your customers is crucial to creating a purchasing experience that invites them back again and again. Understanding this data can help brands to make all-important decisions around product development, ensuring that the products their current and future customers want are available and tailored to their needs, where possible.
We're seeing aggressive growth in e-commerce, and we’re only just getting started. Brands need to make sure that their D2C supply chain is ticking in terms of quality, scalability and certainly also cost – and that they have the right partner to support them on their journey.
Creating scalable revenue streams to enable growth
By investing in owned e-commerce channels alongside the major third-party platforms and marketplaces, brands have the opportunity to build an e-commerce strategy that prioritises control and enables growth.
Trading on third-party marketplaces opens brands up to large audience segments, but they can often incur high commissions and shipping costs, which eat away at a brand’s profit margin. By investing in owned channels, brands can create purpose-built shopping experiences designed around their customers and their needs, helping them to increase brand loyalty and profitability.
While there is considerable uncertainty in the market, now might be the right time for brands to increase investment in owned e-commerce channels moving away from reliance on third-party marketplaces and platforms.
During November and December, when consumers will be once again looking for the best deals, brands will want to be front and centre in their minds. Now is the time for retail, lifestyle and FMCG brands to implement changes to ensure success and focus on the work they can do in the lead-up – creating memorable online experiences that customers will remember during global and localised peak seasons.
Embracing an omnichannel strategy to increase agility
With nearly 90% of consumers now expecting brands to offer omnichannel experiences across online and in-store channels, brands have the opportunity to provide their customers with an integrated and convenient shopping experience spanning several touchpoints to increase customer satisfaction and retention.
But embracing an omnichannel strategy extends beyond the online and in-store experiences brands build for their customers. To smartly manage inventory and operate a streamlined e-commerce strategy, brands need to adopt omnichannel fulfilment to bring agility and resilience into the supply chain.
Omnichannel fulfilment enables brands to simplify and speed up order fulfilment through automation, increasing customer satisfaction and streamlining operations.
For global retail, FMCG and lifestyle brands, this means having the right supply chain setup in destination countries, knowing how much inventory to hold and where, and flowing inventory faster and with greater accuracy.
According to a 2023 retail industry outlook report from Deloitte, eight out of 10 executives consider investing in omnichannel experiences as a key growth opportunity for this year. By holding multiple distribution centers across the supply chain and placing popular products closer to market, brands can make quicker decisions, serve multiple channels all at once, and deliver a better experience to their customers.
With Maersk on their side, brands have access to a trusted and experienced partner to guide them along the path to supply chain success, building seamless online and offline shopping experiences and supporting them to streamline their fulfilment strategies.
Using data insights to make smarter decisions
Due to the unpredictability of the last three years, with multiple lockdowns and a string of global supply chain issues impacting all companies’ operations, many brands decided to over-invest in stock to avoid potential future disruptions.
But now, with warehouses overstocked with an abundance of inventory, 35% of retail executives surveyed by Accenture in October 2022 said that their brands were heavily discounting goods or taking ‘special measures’ to clear their inventory. While this is one solution to the problem, brands should also be investing in systems which allow for total supply chain visibility.
Advanced Supply Chain Group notes that at-capacity warehouses and slow-moving stock will see brands ‘overhauling supply chain management software’ this year.
By harnessing the power of data insights, brands can unlock greater visibility and transparency, allowing them to plan for the future and avoid bottlenecks which hinder the fast flow of goods from factory to sofa.
Digitisation is something that Maersk will be investing heavily in over the coming years. In particular, digital twins present a potential solution to easing supply chain challenges, allowing brands to maintain visibility of their physical assets through digital representations.
As McKinsey reports, competition for warehouse labour is making automation crucial to business growth. Digitisation is the future of decision-making in logistics and will certainly ease challenges for brands operating in the e-commerce space – but only those that embrace this approach now will guarantee staying ahead in an ultra-competitive market.
Preparing for the peak with the right partner
Retail, FMCG and lifestyle brands have a lot to consider when it comes to investing in an agile e-commerce strategy that facilitates business growth – building a customer-focused experience, unlocking new revenue streams, embracing an omnichannel strategy, and harnessing the power of data are all part of this.
But most importantly, brands need a partner that can go the distance and support that growth. Through the power of Maersk, brands can maximise inventory control and increase visibility, all while building closer relationships with their customers.
As we look ahead to the peak season, brands have an opportunity to prepare themselves as best as they can in collaboration with a globally connected partner.
While the current economic outlook appears bleak and unpredictable, it offers agile and resilient brands the chance to drive an e-commerce strategy that meets the needs of consumers at the current moment.
As Valtech predicts, we’re reaching the end of an era in the world of e-commerce and preparing to enter a new one. Competition is intensifying across all sectors, and only brands that establish a relationship with their customers ‘beyond product assortment, pricing and functional benefits’ will survive in the long term.
It is therefore crucial that brands prioritise building, nurturing and maintaining relationships with consumers, providing seamless online buying experiences that encourage brand loyalty, increase customer retention, and future-proof their operations into the new age of e-commerce.
A partnership with Maersk is key to this. With global reach and expertise, our teams can support brands to enter new markets, fuel e-commerce growth, manage costs, and reduce supply chain complexities to ensure success in the peak season.
To learn more, visit E-Commerce Logistics & Order Fulfilment Services | Maersk
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