Among the precautions businesses take to deal with the coronavirus outbreak, companies selling across multiple B2B and B2C channels need to review their ability to manage extra inventory while also planning for disruptions to their supply chains and distribution center operations, Alexandra Wood of LiveArea writes.

AlexandraWood-LiveArea

Alexandra Wood

In response to the coronavirus scare, the ecommerce industry has seen giants like Adobe Inc. and Qualtrics—providers of digital technology and services designed to help companies engage their customers—either postpone their annual summit until the fall or make it an online-only event. An even bigger issue for ecommerce companies is a disruption to their supply chains.

Business professionals can safely assume that such matters will 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?

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.

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 not only to 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.

Going remote

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 amongst far-flung teams.

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As employees and employers embrace working remotely, companies should have clear employee communication plans in place. Additionally, for interactions with partners that may traditionally take place in person, business professionals may need to carry these out 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 replenishments are 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. Brand manufacturers that provide core products but few seasonal items will more readily support such efforts. More critically, those companies with multiple consumer distribution touchpoints will be able to react to shifts in fulfillment challenges.

Flex the fulfillment model  

Brands with omnichannel operations or multi-location distribution centers can flex their fulfillment model, 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.

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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.

Supply chain disruption is the most significant impact of the Coronavirus 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.

Alexandra Wood is director of client solutions for LiveArea, a provider of business-to-business and business-to-consumer ecommerce and fulfillment technology and services.

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