Challenges, shortages and disruptions ahead. 4 minutes for a better retail industry. Read on.

We are experiencing in real time the main drawback of a global economy. Just as COVID-19 has been a universally shared experience, the supply chain crisis is also unfolding around us. For most consumers, this is the first time that supply and demand have been so out of whack simultaneously. The domino effect is unprecedented: plant closings; goods out of stock; shortage of containers; queues at the port; labor shortages; unprecedented demand for products; and now, inflation. By avoiding traveling, dining out, attending events, or shopping, consumers saved money. They’re finally back and ready to spend, but retailers and brands are struggling to fill inventory to meet demand. Apparently, no industry has been spared, with a widespread shortage in everything from semiconductors to sneakers.

It’s a fate that this holiday season will be riddled with toy shortages that will make 1996’s Tickle Me Elmo Great Frenzy look quaint by comparison. However, these supply chain disruptions will not miraculously disappear with the arrival of the New Year. For example, we already know that the semiconductor shortage will not abate this year, with some industry analysts predicting its end in 2023. Inflation has already become a factor in the market and doesn’t appear to be easing anytime soon. Investors will also be affected, with product shortages dragging profits over the coming months. Micron Technologies (NASDAQ

NDAQ
: MU) topped fourth-quarter earnings, but shares of the memory chipmaker fell 3.6% due to its “bleak” outlook for its fiscal first quarter 2022, which was revised down from about $ 1 billion.

What good is all this pain if we don’t learn from this situation and evolve?

The system may have been shattered by the unprecedented shutdown of the world, but if manufacturers and retailers can learn a lesson from all of this, it’s that they need to be more data-driven to mitigate potential disruption by supply chain courses or futures.

Now is the time to take the guesswork out of manufacturing, buying and marketing while mitigating risk by using technology to fundamentally change the way products are sampled, produced, tested, priced and marketed.

Integrating solutions such as digital product testing and voice of the customer analysis will help connect consumer demand, price elasticity, suggested offers and optimize merchandise assortments in these uncertain times.

Without listening to the voice of the customer, how do retailers even know if the products that have taken so long to arrive will resonate with their customers? They really don’t.

These technologies are not a silver bullet. It wouldn’t have changed current shipping issues, but it would inform smarter, faster inventory decisions and improve the likelihood of higher consumer engagement, fewer markdowns, and higher margins. Every second counts, and our supply chain issues will be with us throughout 2022.

Technology solutions can give manufacturers and retailers some control over this situation to better predict by giving them the peace of mind that they have the right product at the right price for their customer.

Stay tuned for more on this topic in the coming weeks.

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About Aldrich Stanley

Aldrich Stanley

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