Early Supply Chain Impacts in 2022

A supply chain trifecta is happening in retail with the turn of the new year with supply chain disruptions from three major areas: transportation delays, COVID store closures, and winter storm Izzy.  So, how might this be impacting consumer behavior and POS? 

Let’s use the following data as an example of what is likely happening across the retail landscape.

retailer POS graphic showing dollar sales

Just as you would expect, right? Store (brick & mortar) POS is seeing a decrease in sales at –6.86%. After all, traffic numbers are significantly driven down by COVID and Izzy as customers have continued to shelter at home for various reasons. 

But, in this example, Digital is up in a major way at +226%! While it is not enough to make up for lost store sales, the benefit of gaining customer loyalty and repeat purchases will pay off in the long run.  Get your item on their list to gain their loyalty.  

Store sales decreasing because of this supply chain trifecta while Digital sales increase is a trend likely happening across all retailers.  

In general, we expect that Digital channels that utilize store-level inventory to fulfill online orders to be up significantly.  The supply chain trifecta could be causing a major shift from what you have previously seen. 

Ideally, your team has planned for these situations and prepared with safety stock in the stores to handle the Digital demand.  Though, it’s difficult to ever be fully “ready” in times like this and situations that are rapidly changing.  

How does Harvest Group respond in times like this to capitalize on the huge opportunity to capture POS, grow share, and serve the consumer? 

  1. Get granular with the data. Find items where Digital sales are growing at faster rates than normalized sales. 
  2. Work with your Replenishment Manager to increase safety stock on the items you’ve identified. 
  3. Button up your Digital strategies and tactics. Prior to the trifecta, hopefully, this was already ready to go. Assortment, content, images, and SEO are the essentials. 
  4. With Digital in order, focus on inventory. Make sure you have product ready!  

With all these factors in check, your brand has a huge opportunity to get on shoppers’ list and gain share. 

Harvest Group is ready to help you! Everything discussed above is standard practice in the work that we do for our clients. Harvest Group works as an extension of your team and is always working proactively to manage your business. If you have needs in your business or questions, don’t hesitate to contact us. Fill out our Contact Form here or email hello@harvestgroup.com. Now, back to gaining share……