No brand has been immune to the ongoing supply chain crisis over the last year. Issues have spanned far out of manufacturers’ control and had a serious impact on nearly every kind of business.
But even though inventory challenges are more commonplace than ever, the critical importance of maintaining stock has not diminished—especially in ecommerce. Being out of stock kills any momentum in online sales, causing brands to fall behind quickly and face an uphill climb to regain steam.
At the end of the day, the customer—ever-aware of these issues themselves, thanks to a constant news cycle—still wants it now.
“Stock and availability are what’s winning,” said Christie Lomanov, Brand Manager at BrandJump. “That’s taking precedence over aesthetic and maybe even functionality.”
At BrandJump, we’ve seen the impact vary widely from brand to brand—and some have certainly fared better than others. Those that can react faster to challenges can head off issues that multiply into a backlog that is hard if not impossible, to recover from.
“Stock and availability are taking precedence over aesthetic and maybe even functionality.”
Here are a few successful strategies and tactics we’ve seen for keeping up with inventory in even the most trying times:
Stay in constant communication with your team.
A daily or weekly stand-up with key decision-makers on the team can help you stay ahead and foresee problems before they are too late to resolve. Get the right people in the room and take time to review the inventory situation at a detailed level. This allows manufacturers to identify issues—and more importantly, react quickly to resolve them.
“If you know a shipment of your best-seller is delayed, maybe you can edit an order to tack on more for your second- or third-best product,” Christie said. “You can determine what other levers you can pull.”
The key is making decisions and taking swift action before issues escalate.
Order early and focus on a ‘never-out’ list.
Increasing orders to ensure products remain in-stock is just one piece of the puzzle. Manufacturers should also place orders early to avoid gaps in stock status, along with allocating capital disproportionately to a “never-out” list.
A never-out list contains your brand’s top 100 SKUs—or however makeup roughly 80 percent of your sales across key retailers. These are the products that matter the most to your ecommerce business and keeping them in stock will have the greatest impact on your online sales.
Being able to order in greater quantities comes down to resources—budget, room in the warehouse, staff. But if you can focus additional budget on the “never-out” list, it will go a long way to maintain the traction you’ve made in your ecommerce business.
Consider padding your lead times.
Even though adding to already-long lead times sounds counterintuitive, it may be worthwhile to provide a buffer when placing product orders.
For example: Say you need to place an order for a product running low on stock. The lead time is 7 months instead of the typical 5 months. To guard against any stock disruptions, you’ll want to place an order larger enough to cover another 7 months after it arrives.
Adding that cushion helps you stay ahead, plus better guarantees a good experience for both retail partners and the end consumer.
Be nimble.
Being able to make needed moves quickly is vital to staying ahead in your ecommerce business.
“When you see a problem, pivot to address it,” Christie said. “Strategize quickly so that it doesn’t snowball.”
She added that brands who don’t react quickly enough end up on the back foot, falling further behind and making it increasingly difficult to make up sales lost to stock outages.
Evaluating your company’s ability to be agile will better prepare you to handle uncertainty in a strategic manner.
Go back to basics.
“Merchandising 101 all ties into inventory. Do you have the right assortment? Is it priced right?” Christie said. “It is all such a trickle-through and thinking through the line can increase confidence to swing the pendulum a little further to ensure you stay in stock.”
Confirming your overall merchandising strategy is well-aligned to the market is a critical foundation for sustainable success. That also includes having a marketing strategy, like promotions and retail partnerships, that helps drive volume and keeps your stock moving.
Regardless of how familiar the online “out of stock” message becomes, inventory outages will always be poison to an ecommerce business.
Staying vigilant will keep inventory problems in check to the best of your ability and ensure you can bounce back more quickly when challenges have passed.
