Gaining an edge from supply chain challenges

Marketers are no strangers to difficult circumstances. Rising prices and persuading people to buy stuff in the midst of a recession are just some of the challenges facing marketers right now.

But inflation isn't the only headwind: massive, sustained supply chain disruption is still very much a thing. That means there's genuine uncertainty regarding whether consumers can buy the things that retailers convince them to want—because the goods themselves are simply not available. 

That's a big deal because it not only affects the bottom line but also has the potential to turn customers against brands. Fifty-eight percent of consumers told EY last fall that product availability ranked as a top purchasing criterion, up sharply from 47% in the spring. In fact, product availability is tied to price as consumers' top buying concern. It's becoming increasingly clear that customers really don't like discovering that the things they want aren't available. 

The intensity of that consumer sentiment, coupled with the dawning realization that global supply chain issues aren't likely to be resolved anytime soon, means companies and marketers must adjust to accommodate a new reality where inventory fluctuation is the norm—and find a way to win anyhow. 

Don't worry, there IS good news buried underneath the supply chain disruption. The EY survey clarifies that consumers are beginning to place the same premium on "in stock" items they once reserved for "on sale" items. That means availability is emerging as a high-value selling point, creating opportunities for marketers who can leverage its power. 

Tying together the first and last mile of the sales process 

The first step in building a marketing strategy around availability is gaining up-to-date visibility into the state of your brand's inventory and supply chain pipeline. If marketers lack a clear picture of what you have in stock, what you'll have soon, and what you just ran out of, there's no way to adjust their plans accordingly. 

That means it's imperative to build a technological bridge between the side of your operation that focuses on inventory and supply chain intelligence and connect it with the company's sales and marketing teams. Technology isn't the problem here, but culturally this can be quite the jump, and fostering an ongoing link between logistics and marketing can be a mind-bending notion at companies where those departments have traditionally had little to do with one another.

Yet it should also be apparent to both teams that such a partnership can deliver huge value. For example, it enables marketers to gain visibility into variables such as shipping delays from overseas manufacturers and unpredictable production timelines. That sort of predictive insight enables marketers to pull promotions related to goods that won't arrive on time or will sell out quickly and focus instead on the inventory that's ready to go. Logistics teams can also estimate the cost of, say, a free-shipping promotion and how it would affect a campaign's profitability.  

A stronger partnership between the marketing and supply chain teams can also work in reverse, with the logistics teams adjusting their orders based on the timing of different promotions or observations about shifts in consumer demand. IKEA, for example, uses artificial intelligence to predict when (and at which locations) its customers will buy certain items and adjusts its manufacturing plans accordingly. 

Automation is a critical component here. Much availability-related marketing fails to happen when inventory data is too slow to reach the marketing team. The same can happen with a lag in purchase data.   Serving ads and sending emails for a product the consumer already purchased is not only detrimental to the brand-consumer relationship, those ads and emails are a waste of marketing spend. Verified Purchase Optimization, Epsilon's innovative partnership with IRI, is one way brands can combat ad waste by delivering digital media aligned to an individual's purchase cycle. This means consumers won't be haunted by ads of purchase pasts and brands will save money.   

The same rule applies—even more so—to circumstances where customers are not only being served ads for unavailable products but are able to place orders before learning what they purchased is out of stock. Those missteps can be avoided when automated marketing messages and website displays are tied to inventory levels, enabling retailers to refocus their outreach and approach based on available items. 

Harnessing the power of availability

Supply chain disruption has spurred an increase among several different approaches to availability-based marketing. Some retailers are responding to out-of-stock issues stemming from supply chain disruptions with transparency, sometimes by noting the logistics issues and sometimes also by offering discounts to consumers who are willing to wait weeks or months for an item to arrive. 

Others whose inventory isn't as reliant on the vagaries of global shipping and manufacturing can trumpet that their products are readily available. Supply chain delays also have raised the stakes for a classic marketing hook: you'd better buy soon because there are only a few more items in stock. 

Other companies, meanwhile, are dealing with the opposite problem – too much merchandise, owing either to over-orders placed as insurance against delays or because merchandise arrived too late for the intended season or promotion. 

Retailers who made big manufacturing bets as a hedge against supply chain uncertainty are learning that the perils of overstock can be nearly as dangerous to their margins as running out of inventory. One option for brands and retailers is to save those excess goods for a future season; another is to push excess merchandise on to discount resellers. But other retailers such as Everlane are choosing to incorporate their supply chain struggles into their marketing by making surplus inventory the hook for an email marketing campaign. 

There are inherent risks in too much supply chain transparency, such as customers may abandon a sale so they can purchase the same item from a different seller who promises to supply the item faster. But given the consumer frustration and relational damage that can stem from an unfulfilled brand promise, many marketers are deciding that it's in their long-term interest to be up-front with their customers. Focusing on what is in stock might be a better move, however. By highlighting what's available now, brands can show supply strength even amidst uncertainty.

Supply chain disruptions are here to stay, at least for the foreseeable future. That uncertainty poses challenges for marketers but also gives them access to a powerful incentive: availability.