Combatting the crisis
The COVID-19 challenge is causing unprecedented disruptions throughout the global supply chain.
At TAGG Logistics, we see three major trends that are driving change in the fulfillment industry today. Manufacturers in the CPG industry who recognize and act on these trends can better prepare themselves to not only minimize service disruptions to their customers—but also thrive in a time of uncertainty.
1. Maintaining business continuity
There has never been a greater need to manage the risk of disruption up and down the supply chain—including fulfillment, where products connect with customers. “This COVID-19 pandemic offers a wake-up call to companies who have not taken risk assessment seriously,” said Mark Chockalingam, president of Valtitude, a demand planning and forecasting consultancy.”1
To mitigate fulfillment risk, manufacturers should work with logistics providers that offer:
- Multiple points of fulfillment across the country – such as Reno, NV, Chicago, IL, and Duncan, SC
- Redundant and back-up resources to ensure continuity—no matter what.
- Ample capacity to scale up, as the role of fulfillment in delivering America’s products continues to increase.
2. Accelerating omnichannel sales
When brick and mortar retail stores and shopping malls are shuttered across America, where do consumers turn to shop? Online, of course. These retailers are basically becoming e-commerce companies, shifting their advertising dollars to online spending. In late March alone, brick and mortar retailers increased their online ad budgets by 15%, according to MediaRadar.2
E-commerce is a critical component of a broader omnichannel sales strategy. Manufacturers will want to build a strong and reliable omnichannel fulfillment network that supports a healthy brand experience—no matter where customers engage with the brand:
- Your brand’s website: integrating with your shopping cart to deliver the brand experience customers expect.
- Digital marketplaces: such as Amazon.com, as well as storefront digital outlets like Walmart.com. Plus, category marketplaces like ebags.com.
- Digital channels: including daily deal sites, flash sales, subscriptions boxes and social media.
- Non-digital channels: including catalog sales, direct response TV, mail, kiosks and more.
- Retail storefront: keeping products on the shelves at brick-and-mortar stores like Walmart—meeting each retailer’s unique IT system, shipping and delivery requirements.
Just how large of an impact has the COVID-19 crisis made in the omnichannel world? Focusing on e-commerce sales growth illustrates the point: in the first half of March 2020, overall e-commerce sales increased 25% between March 13 – 15 compared to March 1 – 11.
Stockpiling created astronomical bumps in the sales volume of some products from January 1 to March 11—such as hand sanitizer (+807%), over-the-counter medications (+217%), canned and non-perishable foods (+87%)—and of course, toilet paper (+231%).
Online purchasing and direct-to-consumer delivery weren’t the only internet-related activities that have seen greater activity. Buy online/pickup in store (BOPIS) and curbside pickup increased 62% from February 24 to March 21.3
TAGG Logistics takes Your Business EverywhereSM, delivering the right brand experience regardless of how and where your customers engage. We’re perfectly positioned to support your omnichannel sales efforts.
3. Restricting shipping at Amazon
On April 11th The Wall Street Journal asked its readers, “Will We Forgive Amazon When This Is Over?”4Amazon has been limiting its shipping to “essential items” only, which include health and household, groceries, industrial and scientific, beauty and personal care, baby products and pet supplies.5
For manufacturers who don’t fit in any of these categories—and rely heavily or even exclusively on Amazon for distribution—they’re asking the obvious question: What do we do now?
One proven approach is to build a truly omnichannel experience in which you lessen (or even eliminate) your reliance on Amazon for distribution. For example, you could leverage your own website and/or take a broader digital marketplace approach with Walmart.com or Target.com.
For manufacturers who want to continue using Amazon for sales—but are concerned about disruptions with distribution—they can leverage a Fulfillment by Merchant (FBM) model. Instead of having Amazon handle fulfillment from its own facilities, you take responsibility yourself for storing, picking, packing and shipping. If you don’t have the infrastructure yourself, you can partner with a third-party fulfillment company to run your e-commerce order fulfillment centers for you.
One with the right expertise, infrastructure and technology can help manufacturers successfully deliver an omnichannel experience, connecting customers wherever they are to the products they’ve come to know and love. TAGG is well versed in helping manufacturers create this omnichannel experience, including Amazon FBM and Amazon Seller Fulfilled Prime services.
Stepping up in a time of uncertainty
“Companies need to pay extra special attention to their digital and ecommerce experiences right now,” said John Copeland, vice president of marketing and customer insights for Adobe Analytics. “Consumers are less forgiving during a time like this, and the companies that meet and exceed their needs will build loyalty and lifetime value.”6
At TAGG Logistics, we couldn’t agree more. As these ecommerce fulfillment trends continue to evolve, we’ll continue to offer not only our perspective, but also our support in helping you succeed.
What trends are you seeing today—and how are they impacting your business? Let’s keep the conversation going.
1 Supply Chain Dive. “Supply chains will survive the pandemic, but revised strategies may take hold.” April 2, 2020.
2 Multichannel Merchant. “COVID-19 Drives E-Tail Ad Spend Up, But Slammed Big Boxes Slow the Pace.” April 3, 2020.
3 Multichannel Merchant. “U.S. Ecommerce Sales Up 25% Due to COVID-19, E-Grocery Doubles.” April 3, 2020.
4 The Wall Street Journal. “Will We Forgive Amazon When This Is Over?” April 11, 2020.
5 Retail Technology Review. “Have you been ‘put on pause’ by Amazon?” April 8, 2020.
6 Multichannel Merchant. “U.S. Ecommerce Sales Up 25% Due to COVID-19, E-Grocery Doubles.” April 3, 2020.