With the ongoing pandemic, labor shortages, and a major boom in online shopping, the global supply chain experienced some serious issues in 2021 — forcing many retailers to stray away from the two-day shipping guarantees shoppers have come to expect.
But is there an end in sight? Or should retailers seriously consider domestic manufacturers to reduce the likelihood of overseas supply chain delays? We know these questions are on your mind, so here are our top three predictions on what to expect in 2022.
While delivery times recovered in late 2020 and early 2021, they have yet again dropped below peak-pandemic levels.
According to supply chain experts and trade credit insurers, current disruptions to global supply chains are expected to last until Q3 of 2022. Some of the factors affecting that prediction are:
Renewed virus outbreaks (such as the omicron variant)
China’s zero-COVID policy
The upcoming Lunar New Year (some factories choose to close up to four weeks!)
Product unavailability has the power to negatively affect customer loyalty and trust — and subsequently, your bottom line. If you start to see your list of backordered items steadily increase or receive an onslaught of frustrated emails from customers, it’s time to take action ASAP.
To make up for global supply chain issues, invest in your overall shopping experience by:
Providing customers with honest, transparent communication about orders. Don’t be afraid to notify them about delays up front — it’s better to set reasonable expectations rather than disappoint them later.
Expanding customer service, so concerned shoppers can get 24/7 help.
Leveraging personalization to recommend similar product alternatives to those that are backordered.
While consumers are still buying at higher levels compared to pre-pandemic, forecasters believe demand will begin to normalize in 2022.
Here’s why: During the height of pandemic lockdowns in 2020, many turned to online shopping, searching for home-related products to make sheltering inside more bearable. As we look toward 2022, people are shifting their focus to in-person services and experiences compared to simply spending in the virtual world.
Even if your current customers aren’t ready to shop with you again yet, that doesn’t mean you should ignore or neglect them. There are many ways to ensure your brand stays top-of-mind, so when they are ready to purchase, they’ll head right back.
Use non-purchasing channels to engage shoppers (e.g., via a brand community, virtual or in-person experiences, or content marketing)
Reward shoppers for their patience and loyalty via a generous rewards program, giving them even more reason to checkout
In 2021, a 40-foot container typically priced at $2,200 surged to a jaw-dropping $10,300 — yeah, it’s safe to say we’ve all had enough of escalating shipping prices.
There’s light at the end of the tunnel, though: A combination of shipping port fines and new investments in port infrastructure and waterways are expected to help ease shipping and delivery congestion in 2022.
Surging shipping prices in 2021.
That doesn’t mean it’s time to drop everything and start celebrating… yet. Due to the chip shortage, the production of new trucks has slowed, creating a bottleneck in the transportation that helps move your packages from ports to warehouses and customers’ doors.
Your logistics nightmare is likely to continue a little while longer, but the combination of our first two predictions point to some relief in the second half of 2022.
Some retailers are rewriting their production playbook by replacing global supply chains with more regional networks. Take a moment to research alternative manufacturers and suppliers — the closer you are to your customers, the less impacted you’ll be by global supply chain shakeups.
A massive reason for current supply backlogs is retailers’ “just in time” business model. While it’s great to operate lean, consider the benefits of backup suppliers or other fulfillment options.
Continue being creative by offering fulfillment options or products that don’t require shipping and delivery. Here are some ideas to get started.
Beyond these three predictions, we created a supply chain forecasting worksheet to help streamline your inventory management and fulfillment challenges. Once you fill it out, make sure to download the AdRoll app for Shopify merchants — we’re here to help level up your ads, emails, and customer journey, so products fly off your shelves in no time.
Last updated on January 25th, 2022.
