By Are Traasdahl
Global supply chain challenges continue, and where the focus during the height of the pandemic had been on shortages, we are now facing an overabundance of product as CPG brands and retailers over-corrected and ordered more supply than consumers needed – or can now afford. This overreaction throughout the supply chain – called the bullwhip effect – leads to oversupply, which typically leads to price drops, and many companies are headed in this direction in the months ahead.
A perfect storm is approaching—where a pending recession and a bullwhip effect are set to collide. There are a lot of moving pieces that everyone from logistics to marketing needs to consider and plan for as this situation unfolds. To effectively weather the storm, it will be critical to leverage real-time insights and enable real-time decisions across the business. This includes an often overlooked but critical aspect – the need to align marketing campaigns with real-time product inventory levels and in-store conditions.
The need for greater alignment of marketing with supply chain insights Brands everywhere are seeing the writing on the wall, with many already looking for ways to reduce portfolio complexity to better navigate the growing market pressures. Take Coca-Cola, which began to significantly reduce its portfolio last year, only keeping top-performing products. While cutting smaller, beloved products might make consumers upset in the short term, the company is making room on shelves for the items that meet overall consumer expectations, generate the highest profit, and free up supply chain capacity.
Understanding how supply chain issues impact and inform what products are on shelves is important, but C-level executives also need to assess how their marketing campaigns – and their marketing dollars – are impacted by this revolving door of disruption.
For example, when a brand has real-time visibility into what is happening in their supply chain, they are better equipped to take advantage of opportunities to move more products faster through the right distribution channels based on where they are needed.
These insights need to be shared with marketing teams, who are tasked with adjusting campaigns quickly to 1) ensure strategy and tactics are still accurate and relevant to what is on the shelf and 2) to showcase actual business impact, not campaign performance. The latter is especially important as the global economy inches closer to recession.
Financial pressure will inevitably increase within organizations, and marketers will need to prove the effectiveness of campaigns and their ability to impact the bottom line.
How to navigate the complexity
With mounting pressure for profits and consumer spending, brands need to operate more effectively and efficiently. It is not just about solving supply chain challenges or reducing the number of products in the portfolio – businesses need to evolve with meaningful, measurable marketing as well. That is exactly what advanced technology solutions can help with: bringing insights and important trends to the surface for all departments to leverage.
Here are three ways that the right data can help brands better navigate the uncertainty by leveraging supply chain insights to inform marketing efforts:
1. Nail the product launch: It may seem obvious that marketers need to know exactly when new products hit each market and store as they launch campaigns, yet many don’t have that insight today. What if a massive storm impacts the delivery date of a product that was supposed to launch on September 1 but now won’t be available until September 15 in a target region? With real-time insights into shifts such as this, marketers can change the date of their local media buys to start when the product is available. Otherwise, they are wasting marketing spend, and potentially frustrating consumers.
2. Sync marketing spend with inventory: As financial pressures start to spike across the market, marketers can allocate “always-on” spend based on real-time product availability to help save costs. Consumers always assume that Coca-Cola will be on the shelves, for example, but if there is a supply chain challenge that results in the product running low, marketers can pull back on promos in that specific region until stock is back up to save on ad spend. Alternatively, if a retailer is overstocked with a certain product, marketers might want to put more spend behind their ads to strike a better balance between supply and demand before having to drop prices altogether.
3. Maximize seasonality: When marketers have access to daily point-of-sale and inventory data as well as weather-related data, they can more confidently plan and execute their strategies during all seasons. For example, if a brand has a new ice cream product, they are ready to promote, but they’re waiting for the summer, changing temperatures could drive adjustments in the promotion timelines. If an uptick in sales for related products occurs in a few regions that are experiencing higher-than-normal temperatures during springtime, instead of waiting, the brand could start to promote the new product sooner in those regions and drive increased revenue.
There is a long list of external factors impacting and influencing the market, and while the storm may be approaching, there are tools available to help brands effectively navigate what is to come. At the core is having real-time access to data and insights that allow companies to adjust and constantly optimize their plans to drive better outcomes.
Are Traasdahl is co-founder and CEO of Crisp, an open data platform connects and analyzes retail data across the supply chain, empowering brands, distributors, and retailers with real-time, actionable insights to keep shelves stocked, reduce waste, and improve profitability.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
