Just when we thought 2020 was a wild year, then came 2022. This year has brought with it the aftermath that is the COVID-19 pandemic. The fallout includes a labor shortage, a shipping crisis, and massive inflation. Naturally, this is keeping companies on their toes and planning for a possible recession. Other than company-wide layoffs, retail e-commerce companies are struggling to keep up with demand and pricing products correctly to be on track with inflation. Essentially, this busy season is like one we have never seen before which means retailers need to start planning for the future today. Here is what you need to do to stay focused and ahead of the game for this busy season.
From October 2021, inflation grew by 2.9% to August 2022. Since 2020, inflation has grown 7%, reaching new heights of 8.5% according to the Statista Research Department. Research by Trading Economics reports that the annual inflation rate eased in the US for a second straight month in August, which is the lowest it’s been in 4 months at 8.5%. The inflation rate then affects the consumer goods rate. The Consumer Price Index by the US Bureau of Labor Statistics reported that before season adjustment, all items index increased 8.3%. As the economic theory states, when general inflation raises so does the price of consumer goods. Unfortunately, for e-commerce sellers, you have to continue to raise prices in order to keep the profit margins the same. Consumers, as far as we know, are expecting this increase in price and are planning accordingly.
We are still feeling the effects of the labor and shipping crisis. Though it is easing up, the shipping container supply chain crisis is still struggling with labor shortages and bottlenecks. The supply chain is vulnerable to any big shocks like bad weather or additional lockdowns. The busy holiday season will be a test of strength for the recovering supply chain. E-commerce inventory relies on container shipping. If containers are slow to unpack, then items are slow to fill the shelves and warehouses. Consumers, in this day and age, expect products to be on their doorsteps by yesterday. The best way to keep consumers happy and buying during the busy seeing is to be transparent about the inventory you have on hand. And the best way to stay up-to-date with current inventory levels is by using technology. Order management systems are a great resource for sellers during the busy season.
It’s as simple as what is the industry calling for. Listening to the industry and to your competitors help you forecast your business strategy. Looking at the e-commerce industry is also about seeing what consumers are doing. Are they shopping more in person? Is general spending reduced? Make sure you answer these questions and more as it pertains to your industry to predict your consumers’ behavior.
Look at the numbers! Last year, due to the shipping crisis, consumers were shopping in October for the holidays and companies were starting their “Black Friday” sales months in advance to ensure customers got what they wanted for their gifts. Analyze your sales, labor productivity, shipping costs, and other overhead costs applicable to your industry. All of this specific analysis will help you determine what is needed to fulfill customer expectations and plan your shipping strategy. It’s important to analyze industry numbers as well. You can find statistics on consumer spending from various reliable sources and it can help you forecast for this busy season.
Doing everything by hand takes precious time away from your business growth and success. We have mentioned data analysis, order management software, and a shipping strategy. All of these tasks can be streamlined with one easy piece of software, DesktopShipper. DesktopShipper allows your business to manage orders, analyze data, and shipping strategy, and overall, grow your business. You can stack your already existing preferred marketplaces and carriers by putting them into one centralized view. DesktopShipper makes the job simple.