The future of commerce is difficult to predict, but it’s certain that moving forward, the COVID-19 pandemic will still be an issue. There’s no doubt it will continue to change commerce even well after it’s contained.
Customers have already started relying more heavily on ecommerce since the COVID-19 crisis started and stores closed down — there was a 13% boost in ecommerce penetration within just a matter of weeks. The numbers are even starker when comparing 2020 to 2019. According to Forbes, there was 129% year-over-year growth in U.S. and Canadian ecommerce orders as of April 21. For all online retail orders, the numbers showed a growth of 146%.
Growth like that is difficult to reverse. Looking forward, COVID-19’s impact may reverberate in two key ways: First, ecommerce companies will have to prepare supply chains for added resiliency. Second, ecommerce will need to adapt to changing customer expectations, as COVID-19 altered how they think about the last mile aspect of delivery.
Let’s look at how brands can prepare.
How to “Pandemic-Proof” Your Supply Chain
At a severe cost, COVID-19 highlighted issues in modern supply chains. It’s now clear that ecommerce outlets need to think about their supply chains in new ways.
One way to do this is to create an accurate supplier map.If knowledge is power, a map of your supply chain will better prepare you for future disasters. But what are the specific steps to create an accurate, comprehensive supply chain map?
- Identifying supplier locations. A supplier with a history of consistency might seem like a reliable source of output for now, but even consistent suppliers are subject to the limits of their location. What are the realistic threats to supplier geography that could cause them to shut down in the future? You’ll want to define and plan for these geographical issues.
- Noting the transportation links. Identify the links in logistics and transportation that separate manufacturers from your customers. What are the biggest threats to these links? Even a consistent supplier can be susceptible to macroeconomic disruptions that are beyond their control.
- Identifying vulnerabilities. If you rely on one supplier with no backup options, you’ll need contingencies. Consider the top sources of vulnerabilities to supply chains. Do these apply to your own supply chain map? For example, an insurance analysis found that “average business interruption losses are highest by value for claims originating from energy, totaling $4.3 million.” Other frequent vulnerabilities: fires, storms, strikes/riots, and flooding. These aren’t under your control, but you can control your contingencies.
- Lead time at each link. One of the largest logistical hurdles during the pandemic: Even as supply chains resumed their links, transportation required longer lead times. Chinese shipping ports opened, but the lead time was still four weeks until supplies hit American shores. In the event of a future catastrophe, you need to know how these disruptions impact your customers.
Digitize Records to Boost Resiliency
What does digitizing your records have to do with your resiliency to an event like COVID-19? Simple: proper data management.
Digitized records make for easier supply mapping. Each ecommerce company with digitized records will better manage its supply chains. The result: minimizing risk and downside.
Take the example of Coca-Cola. Coca-Cola’s bottling companies and supply chains are multinational and highly complex. Then Coca-Cola underwent a process of digitization of its supply chain records with robotics company Ripcord.
“A single vendor [became] able to manage document management, image storage, indexing, and physical storage and shredding suppliers once done by multiple vendors.” Alex Fielding, CEO and co-founder at Ripcord
In doing so, Coca-Cola identified its most wasteful processes. They noticed one wasteful procedure that required sending photocopies to a separate supply chain organization. Before digitization, the company still lost millions of these documents regularly. With digitization, they reduced human error and streamlined the process.
Harvard Business Review also notes that digitization makes it possible to leverage technology that can boost resiliency. For example, digitization makes it easier to conduct supply chain audits. Digital inventories can improve traceability and reduce execution errors, making the supply chain more accurate. Weaknesses become easier to identify and even eliminate.
It’s true: “Catastrophic” events can’t be predicted. There may not be a second COVID-19 pandemic, but digitized records help strengthen and simplify supply chains no matter what disasters arise.
Use Data-Driven Analytics to Focus on Macroeconomics
When forecasting macroeconomic trends, an educated guess always beats an assumption. Whenever you can form your predictions from real data, you’re less likely to make these faulty assumptions.
In ecommerce, you also need data relevant to your market. Otherwise, these predictions won’t be actionable. Use data-driven analytics to find insights into what your customers are thinking. When you know which way the winds are blowing in your own industry, you’ll stand a better chance of capitalizing on these trends.
COVID-19 was undoubtedly a macroeconomic storm. Companies that saw this storm developing in the data could prepare for it. But how do you turn macroeconomic predictions into action-items for your business? Isolate the key factors. Unemployment, economic output, the disposable income of your target audience, and even inflation will all impact the demand for your business.
Should you invest in growth and marketing when an economic downturn is on the horizon, for example? A business that tracks its own data will better understand how its own customers react to macroeconomic trends. The more you understand about customer behavior, the better you’ll be able to meet their needs during macroeconomic downturns.
Bolster Your Last-Mile Delivery Features
This is one of the only areas in all of your supply chain management that your customer sees. If you want to give them a “wow” moment, it happens during the last mile, as it’s the time after the purchase that your business directly interacts with customers. If they love you after the purchase, you can inspire loyalty. But only if you can foster that relationship with a great last-mile experience.
Last-mile delivery is becoming more important than ever. Last-mile constituted an industry of $30 billion in the U.S. in 2018, with projections pointing to an increase to $55 billion by 2025. Knowing that, how can you separate your last-mile experience with a superior supply chain? How can you inspire “love” in the post-COVID world?
- Touchless delivery. This will be especially relevant in the post-COVID world. McKinsey notes that the U.S. has seen a “20% increase in preference for contactless operations.” Don’t expect these trends to reverse overnight. Companies need to be prepared for the reality of changed customer expectations on a macroeconomic level, and touchless delivery is one way you can meet those expectations. A great example of this in action can be seen with the partnership between Shopify and Postmates that enables merchants to quickly enable touchless food deliveries.
- Customer updates. A customer expects more transparency on the last mile than ever. Whenever a customer has to ask “Where is my order?” it means that something has already gone wrong in the supply chain. When there are supply chain issues, any last-mile problems with your company will be amplified, especially in a world that relies less on physical retail than ever.
Leverage Tech-Enabled Solutions
Technology offers many of the solutions to the problems above. With a proper supply chain map and digitized records, you’ll have access to new tech-enabled solutions that will prepare your company for the post-COVID world. There are ways to collect analytics on your customers to gain more macroeconomic insights. Collect the right feedback and you’ll be better prepared to meet customer expectations in any situation–disaster or not.
Loop is one solution. Learn how Loop helps you to bolster your ecommerce for a post-COVID world. The changes are already headed your way; the only question is whether you’ll be able to adapt.