Interviews, insight & analysis on digital media & marketing

Ecommerce Crisis Management: How agility is crucial for success

By Zach Thomann, Chief Operations Officer at PFS

In the lifespan of a brand or retailer, the ‘here and now’ can often be the focus of a business without trying to second-guess the future. Yet recent times have shown that being prepared and agile should be ingrained in the identity of a business, in order to be fully prepared to weather any storm and deliver all-important customer satisfaction in all circumstances. From as far back as the 2008 recession, to the COVID-19 crisis of more recent times, businesses have been tested in ways that couldn’t have been predicted. To be able to withstand increased pressure on resources and customer expectations, brands must make time to strategise to ensure they are fully prepared.

The global pandemic saw a dramatic shift in consumer behaviour, with the isolation of lockdown dictating increased online shopping habits. With this, despite the challenges of the pandemic, came the expectation of efficient delivery times and the consumer demand for brands to respond to this accordingly. Businesses needed to think not only about the short-term in response to the pandemic and change in shopping behaviours, which favoured online as a necessity, but also the long-term impacts of lockdown and shopping behaviours that irrevocably changed as a result.

Whilst the pandemic was unprecedented and brands had to think on their feet to respond to customer demand, current times also prove the need to be prepared. Strikes across industries including Royal Mail, the main postal delivery service in the UK, can hinder the customer experience if a delivery promise cannot be met. According to research conducted by PFS in their consumer pulse check survey at the start of 2022, 42% of shoppers in the US and UK stated they would stop shopping with a retailer or brand for leisure or non-essential items all together, if they didn’t provide good customer service. Whilst some crises’ can be out of a retailers’ hands, forecasting remains a key component to ensuring brands can be as prepared as possible for other situations.

Examples of forecasting in eCommerce includes calculating cash flow, identifying and estimating recurring costs, budgeting for contingencies and analysing the potential of new products and services. Using the festive peak season as an example when many eCommerce fulfilment providers use much of their resource to focus on an increase in demand, short-range forecasting is vital to help prepare for the upturn in activity. This includes taking into account different forecasting ranges which will help ride the wave of a busy time and added pressure of the current economic downturn. Robust forecasting should work hand in hand with supply change management and fulfilment BPO to garner the best results for a business. This means that when forecasting is done properly, retailers and brands can anticipate future sales volumes and understand the macro and micro landscape in order to understand their sales target and pivot it if necessary.

Getting to Know the Customer- Big Data
A key part of establishing accurate forecasting in order to be agile is the use of big data. Data alongside sensible reasoning is integral to forecasting a direction for the future and how an organisation will evolve and best suit a customer’s needs. Brands of different sizes will have to prepare for different challenges. Typically, in the context of an economic downturn, larger premium brands won’t be impacted as much as smaller boutique brands due to level of disposable income of customers – retailers and brands should take time to get to know their customers and use their big data to influence their marketing and forecasting.

Building the Right Infrastructure
In some instances, forecasting won’t be able to pre-empt an outcome that a business can prepare for. This is when a retailer should harness a robust infrastructure in order to ease the level of unpredictability and ensure they can still service their customer. Last year saw a chronic shortage in UK warehouse space, going to show that brands always need a back up option and infrastructure in place, including alternative fulfilment solutions. With the right order picking technology, brands with a bricks-and-mortar presence can utilise their in-store space by incorporating a hybrid facility to fulfil online orders; enhancing the ability to continue business in the busiest of times with a temporary solution. Branda can also take full advantage of a multi-node fulfilment strategy, which can take advantage of micro-distribution sites which are placed close to customers, removing the need to operate from a single warehouse site which may be located far from the majority of the customer base. By taking on such an approach and pairing it with a Distributed Order Management (DOM) system, brands scale effectively, locate stock and fulfil orders promptly.

Leverage Omnichannel Capabilities
Distributed Order Management (DOM) systems are a key component to offering a brand confidence and contingency in all situations in both European fulfilment and global fulfilment. The modern customer expects a fast and effective process, from the moment they order to the day their purchase is delivered. This requires retailers in every corner of the globe to activate the best technologies to serve their consumer. Leveraging an Order Management System (OMS) with advanced omni-channel capabilities gives retailers the power to distribute inventory across the footprint of a businesses to appeal to customers wherever, whenever, reducing out of stock (OOS) disappointment. In addition to this, an omni-channel OMS enables brands to activate seamless customer care in-store or via the contact centre, which is imperative for ensuring success especially during challenging times like the COVID-19 pandemic, support order routing to different locations, regional delivery and customer pick up through Distributed Order Management (DOM) and compete with two-day shipping expectations and reduce freight costs.

Stock Management
Another key element to consider when preparing for any eventuality, is stock management. Brands can create greater warehouse efficiencies by ensuring fast-moving stock can be picked and packed quickly and effortlessly at any given time, and in response to any unprecedented demand. If retailers keep an accurate stock picture, they will ensure end of line/end of season stock is not sitting in piles.

With the current world picture of economic insecurity dominating much of the landscape, retailers and brands can adapt to the pressure the uncertainty brings. The old adage ‘fail to plan, plan to fail’ rings true in the world of eCommerce and by utilising all the advantages available, businesses can be on the front foot to deliver to their customer base in any situation.