Since the pandemic, shortages have impacted practically every industry, causing delays for both B2B and B2C businesses. This, in turn, has caused shipping delays which result in customer anxiety and frustration and have negatively affected the customer experience.
This article seeks to understand how shortages have impacted brands, what those brands have done to mitigate the shortages and how they have kept customers happy during this period of uncertainty.
Recent Supply Chain Shortage News
Supply chain shortages have been a recurring topic over the past couple of years, and here we are, still dealing with practically the same problems across virtually every industry. Once again, anything that originated overseas has been affected. Among the headlines in the past month:
- June 27th: Expect another year of supply chain issues
- July 20th: Supply Chain Shortages Threaten Medical Imaging Testing
- July 25th: Supply chains are still disrupted, corporate economists report
- July 26th: Supply Chain Disruptions up 46% From Last Year
- July 26th: Tackling supply chain challenges together
- July 26th: Grocery Shortages 2022: 9 Hard to Find Products
- July 27th: As supply chain woes persist for school meals, districts get creative
Reasons for continuing supply chain shortages in 2022 include a slow return to pre-pandemic production levels, labor shortages across industries, a lack of materials needed for production and the ongoing war in Ukraine. Combined with inflation, which continues to be at its highest level in over three decades, consumers are feeling a high level of financial anxiety when it comes to shopping.
Consumer Anxiety Is Rising
During the height of the pandemic, consumers were shocked to see bare shelves where there should have been toilet paper, paper towels, hand sanitizer, gloves, bleach, handy wipes and other staple products. They were even more surprised when grocery store shelves began to empty out, and even basic foods used for cooking became harder to find. This created a level of anxiety and shock in consumers that none could remember ever feeling in their lifetimes.
A February 2022 SurveyMonkey poll revealed that 79% of Americans have experienced a shortage of certain items while grocery shopping during the previous three months. And the problem is not limited to shoppers to the United States.
A poll from Retail Insights, released a month later, indicated that 56% of UK shoppers felt shortages are now worse in-store compared to when consumers initially panic shopped at the beginning of the pandemic, and 45% of UK shoppers noticed more items were missing or not available when they shopped online for groceries.
There are many reasons that shortages appear within any given industry’s supply chain. According to a blog from Oracle, the food and beverage industry faces supply chain challenges that include demand volatility, supply uncertainty, labor challenges, capacity and ever-increasing cost and margin pressures. The food and beverage ecosystem, the report continued, includes:
- The sourcing of raw materials
- Wholesale distribution
- Retail distribution
- Delivery to end customers
Any problem in this ecosystem has a ripple effect that extends to all of the individual players (farmers, distributors, grocery retailers, etc.), and how they are affected and respond to the problem determines the ramifications felt by all of those within the ecosystem. This ripple effect is very similar across all industries. Oracle’s proposed solution is Oracle Fusion Cloud Supply Chain & Manufacturing (Oracle Cloud SCM), a suite of cloud-based supply chain applications that enable brands to develop and maintain resilient and growth-oriented supply chains.
Today, as the world awakens from the pandemic fog, only to now have to worry about the war in Ukraine, monkeypox, a looming recession and what is shaping up to be a disturbing general election process in 2024, consumers are still concerned about shortages, which may have shifted, but are unfortunately very much present.
Technology to the Supply Chain Rescue
A 2021 Statista survey showed that 40% of polled supply chain industry professionals have already integrated cloud computing and storage technologies into their brand strategy — and that inventory and network optimization tools will have the highest rate of adoption by supply chain companies over the next five years.
According to a 2022 Blue Yonder Survey, over the next year, 42% of supply chain executives plan to focus on the implementation and enhancement of warehouse management systems, followed by transportation management systems at 36%, order management at 32% and AI at 27%. The survey also revealed that the top priorities related to improving customer experience during the current supply chain disruptions were:
- Keeping high-demand items in stock
- Providing consistent on-time delivery
- Increasing inventory visibility
- Optimizing fulfillment options
Roland Gossage, CEO of GroupBy, a product discovery platform, told CMSWire that technology can help mitigate the impact of supply chain shortages by providing improved, up-to-date search results to consumers interested in buying a product online.
“Artificial intelligence (AI-powered) product discovery platforms can help minimize the impact that retailers are feeling,” said Gossage. “Through AI and machine learning (ML-powered) product discovery solutions, such as search and recommendations, retailers can maintain high-quality user experiences by delivering quick, personalized and relevant search and recommendations results.”
Brands that wish to provide an exceptional customer experience during shortages must have a tight reign on inventory control. “Search AI technology can register and account for low or high inventory and note a product is low in stock for the customer. It can also remove out-of-stock products from the search results, instead providing smart replacement recommendations that still fulfill the customer’s search goal(s),” explained Gossage.
Digital transformation needs to occur within the supply chain industry to alleviate many of the bottlenecks and pain points in the supply chain process. "Largely leveraging legacy technology and outdated processes, the supply chain industry needs modernization to transform back-office activities to better support challenges like inventory shortages for their customers," said Tony Lee, CTO of Hyperscience, an intelligent document processing platform.
"Specifically," Lee continued, "we’re seeing a unique opportunity to seize the power of automation to create an ideal situation for supply chain services, the employees who serve them and the customers awaiting their goods — with the customer being the biggest winner."
How Are Brands Alleviating Customer’s Concerns
Bad customer experiences will drive away customers far faster than supply chain shortages, according to recent research from Mitto. The report indicated that 76% of Americans believe a bad customer experience is worse than shipment delays, and 93% said they are more likely to have patience around delivery delays with a brand they already associate with good customer service. Conversely, 55% said they have canceled a delayed shipment because of a bad customer experience.
Additionally, 79% of those polled said they expect to receive a more attentive customer experience when there's a disruption to their order, and 60% said they want a brand to reach out to them personally if their shipment has been delayed for even 1 or 2 days — a number that jumps to 82% if the delay is over two weeks. Providing exceptional customer service is one of the prime ways brands can alleviate customer concerns when it comes to supply chain issues.
Allowing customers to interact with brands via their preferred medium, especially when it comes to shipping details, should be an important consideration for many businesses.
"One way for brands to maintain and strengthen customer relationships in spite of supply chain disruption is by enabling two-way communication on their customer’s most preferred digital channels," said Matt Ramerman, president at Sinch for Marketing, an enterprise conversational AI platform.
"This is especially helpful when needing to deliver critical information like shipping delays," he added. "This way, brands can engage with customers 1:1 and respond to questions at any and all times: AI-enabled chatbots handle conversations outside of business hours, and can easily hand off to live agents for more complicated inquiries during the day."
Ramerman said that by using conversational AI and natural language processing (NLP), chatbots are now able to seamlessly pivot conversations per customer needs. “So customers can ask about a particular product/service to initiate a dialogue, and then check on a previous order without having to start the conversation from scratch.”
Being able to anticipate the needs of customers before they themselves know enables businesses to personalize messaging and offers for products similar to those the customer has shown interest in but are out of stock.
"Brands can utilize natural language understanding (NLU) chatbots to deliver a personalized experience when dealing with supply chain disruptions," said Ramerman. "Leveraging customers’ preferences and message history, these bots can customize messages to individual customers (even down to dialect and tone), and send automated, personalized offers at key moments in time for each customer."
Annie Weckesser, CMO at Uniphore, a conversational automation tech company, told CMSWire that supply chain-related delays have resulted in higher-than-ever call volumes and an increase in the overall complexity of calls. As a result, many brands have doubled down on AI-driven self-service and automated agent assistance technology.
"Part of that real-time guidance includes managing customer emotions, which can run high, especially when items are delayed or scarce," explained Weckesser. "By using AI to analyze customer emotion and intent, even the greenest agents can adapt their call tactics as needed. That can significantly lower the stress on both ends of the line and add a positive note to customer experience — at exactly the moment when it’s needed most."
Supply chain shortages are likely to continue through 2023, and apologies simply won’t cut it anymore for customers that are aggravated, frustrated and anxious about delayed shipments. By using AI-driven technology, along with inventory assessment, transparency and two-way communications, brands can still provide an exceptional customer experience.