6 Fulfillment Strategies When Disaster Strikes (What COVID Taught Us)
It’s not a matter of if a disaster will strike, but when. This was never more apparent than in 2019, when COVID-19 came into our lives like a bull in a china shop, completely disrupting all of our normal day-to-day activities. One of the hardest-hit industries was the brick-and-mortar retail business.
Many were forced to close, being deemed “non-essential businesses.” Others had to adopt odd hours or practice social distancing and disinfection measures; despite these efforts, many people still avoided them for fear of catching the virus.
Of course, all of this led to a major growth spike in e-commerce businesses. While this is great for eCommerce retailers, it also posed some big challenges that had many reconsidering or implementing disaster recovery and business continuity plans.
COVID's Impact on Ecommerce Businesses
When the coronavirus struck, many people turned to eCommerce because their favorite physical retail stores were closed. One contributing factor may be that the CDC put out a notice that COVID-19 had poor survivability on surfaces so that there was a “very low risk of spread from products or packaging that are shipped over a period of days.” On the other hand, shopping in stores was expected to put people at a higher risk from others due to spread through respiratory droplets.
For these reasons, COVID-19 retail trends changed, and eCommerce began booming. According to Forbes, total online spending was up 77% year-over-year. Experts believe that the virus has essentially accelerated the trajectory of e-commerce growth by 4-6 years! While this sudden demand is good for business, it’s also created problems in the form of inventory shortages, back orders, shipping delays, and more, resulting in frustrated customers.
6 Strategies for Order Fulfillment when Disaster Strikes
Today, after more than a year of pandemic-related lockdowns, some consumers are returning to normal and anxious to get back into brick-and-mortar stores. However, a study shows that 78% of consumers value convenience more now than they did before the pandemic, meaning eCommerce sales aren’t going to plunge just because the masks are off.
And, even though COVID is becoming less and less of a concern across the country as people get vaccinated, eCommerce businesses still need to plan for the next disaster. Whether it’s another pandemic, a power outage, a data breach, or a natural disaster such as a hurricane or wildfire, disaster recovery and business continuity planning is a must. Be sure to read more in our blog, The Importance of Disaster Recovery for Ecommerce Fulfillment, to prepare for future events. In the meantime, here are six things to consider regarding fulfillment strategies when disaster does strike.
1. Prioritize Sales Channels
In the midst of a disaster, you want to be sure you maintain your most profitable and loyal customers. It reasons that if they were with you before the disaster, they’ll likely be with you after it—if you treat them well. While you want to nurture new customers, too, and perhaps turn them into loyal customers, there’s a chance they’re simply using your products or services temporarily because their go-to company is backed up, so always prioritize your regulars.
Pro Tip: If Amazon is your most profitable e-commerce channel, it may behoove you to fulfill those orders first; Amazon stock-outs will negatively affect your inventory performance index (IPI), impacting how your products are treated and come up in searches.
2. Take Advantage of Brand Hoppers
Just because you’re prioritizing regulars, doesn’t mean you shouldn’t try to convert those brand hoppers. Digital Commerce 360 surveys indicate that 44% of U.S. shoppers have tried at least one new brand during the pandemic because their standbys are unavailable or delivery would be delayed. If you’re able to fulfill their needs, brand-hopping consumers can easily be turned into new customers if you’re able to deliver a great buying and unboxing customer experience.
3. Develop Backorder Incentives
One way to avoid losing customers while you restock is to create incentives when an item is on backorder. If a customer can wait for the product, they may choose to order it from you on backorder rather than brand hopping if you provide an incentive, such as free or expedited shipping once it becomes available, a discount, etc.
4. Maintain Fair Pricing
Too many e-commerce businesses have used others’ shortages and their surpluses as an opportunity to price gouge. Don’t do it. You may earn a quick buck doing it, but you won’t gain loyal customers (and you may just run into some legal issues).
5. Streamline Inventory Processes
Online retailers and fulfillment centers can experience labor issues at any time, but the potential for these issues is heightened during a disaster (employees could be ill or quarantined, as happened during the pandemic, or a natural disaster like a flood could prevent them from getting to work). If you have an IT team, have them organize equipment and tools and streamline processes for remote work, ensuring system access from anywhere.
6. Diversify Your Distribution Centers
If you’re not handling shipping on your own, now may be the time to reconsider your shipping strategy. With warehouse demand on the rise, there are three things you should consider sooner rather than later in case you need to make some changes.
- Be sure you have third-party logistics (3PLs) providers that are following best practices for warehousing, inventory, and distribution.
- Consider moving some inventory to fulfillment centers in other locations. This way, if a disaster strikes on location, you can ship products from another.
- Look at where the majority of purchases are coming from; if most are domestic, for example, you may want to keep some inventory within the United States even if it means forgoing some of the financial benefits of overseas manufacturing and production. This way, if the disaster occurs overseas or if there’s a temporary international shipping ban as happened during COVID, you can still ship from your domestic distribution center.
Outsourcing Fulfillment with The Fulfillment Lab
Even in the best of times, fulfillment is challenging, costly, and a big distraction from other important tasks. COVID has taught eCommerce retailers the importance of disaster preparation and forced them to think about fulfillment strategies during an event.
Working with a fulfillment partner like The Fulfillment Lab can also help alleviate your worries!
- We have sanitation and labor policies in place to prevent contagious diseases from slowing order fulfillment.
- We give you flexibility in inventory storage without increasing fixed costs, which is important when demand shifts are greater than ever.
- We have 14 facilities around the world where you can store inventory, diversifying distribution in case of a disaster without having to use multiple 3PLs.
We invented “fulfillment marketing,” which provides the best customer experiences through customized packaging and more. This is critical for keeping loyal consumers during a disaster and converting brand-hoppers.
Want to learn more about The Fulfillment Lab? Contact us today!