The last couple of years have thrown supply chains across industries for a loop. From the COVID-19 pandemic to extreme weather events, almost every aspect of the transport chain has been disrupted. By mid-November 2021, shortages affected everything from automobile production to cream cheese to apparel. Consumers are still facing delivery delays and empty shelves, and manufacturers are coping with unprecedented material scarcity.
Despite speculation that supply disruption might hamper consumer spending, retailers saw a resurgence during the holidays. Mastercard reported an 8.5% increase in retail holiday sales compared to 2020. The same report shows eCommerce sales were also up in 2021, following an already staggering 61% spike from 2019 to 2020.
It seems demand was never in jeopardy. But in a compounding twist, the boosted demand adds to the supply chain kinks. Retailers are struggling to find production materials, facing downline shipping delays, and dealing with staffing shortages. Add an aging infrastructure and narrow strategies, and we have a recipe for massive disruption.
These changing dynamics require thoughtful strategy, intelligent marketing, and innovative solutions. Brands big and small are doing just that, and the results speak for themselves.
More consumers than ever are hopping on the internet for their retail therapy. To handle the increase in demand in late 2021, retail giant Walmart transformed 43 of its regional distribution centers (RDCs) into “pop-up” eCommerce distribution centers (eDCs), so more products could be shipped directly to customers. Using their existing supply chain and the increased flexibility of the pop-up eDCs will continue to help the superstore process peak demand.
In early December, the gap between the skyrocketing demand and the lagging supply chain came to fruition: New York City bagel shops briefly shut down, and legendary New Jersey-based Junior’s Cheesecake had to pause cheesecake production due to a cream cheese shortage. With a recipe that’s remained unchanged since it opened in 1950, Junior’s didn’t have the luxury of switching brands or vendors, and appealed directly to Kraft Heinz to get more of its key ingredient.
While Kraft maximized production to keep up with demand, its marketing team rolled out a creative campaign to quell shoppers’ cream cheese appetites through the holidays. Kraft Heinz announced it would reimburse a select number of customers $20 for a different, non-cheesecake holiday dessert.
The Spread the Feeling offer initially allowed 8,000 participants, but after running out of spots in just a few minutes, the food giant more than doubled the qualifying entries to 18,000.
During times of uncertainty, it’s natural to pull back on the reins.
In 2020, Coca-Cola drastically reduced marketing spend. In a July 2020 earnings call, CEO James Quincey pointed to the lack of anticipated return, remarking, “Why would I want to spend money in a period if I can’t get the return, particularly if there’s a strong lockdown? We thought, no marketing is going to make much difference in the second quarter, so we pulled back heavily.” Unfortunately, the reduction in ad spend also reduced growth for Coca-Cola, which saw net revenues dip 11% in 2020.
Instead of reducing ad spend, companies like P&G and PepsiCo decided to lean into their advertising. As a result, both companies actually increased spending throughout the pandemic, leading to 4% reported growth for P&G and 5% for PepsiCo.
Brand awareness is still a key driver for engagement. Here are a few ways your brand can stay top-of-mind with customers and drive a high-quality brand experience amid supply chain challenges.
If you’re ready to take your marketing to the next level amidst shifting supply chain dynamics, talk to us at WITHIN. Our experts can help you scale promotional efforts across channels without compromising on profitability.
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