Ecommerce Survival Guide: How to Optimize Your Supply Chain and Logistics in an Economic Downturn

Ecommerce brands are facing unprecedented challenges. The after-effects of the pandemic, combined with several global geopolitical changes, has disrupted global supply chains, created a shortage of raw materials, and put immense pressures on retailers everywhere. The current economic downturn is only exacerbating this. This is a major concern for ecommerce businesses. In this turbulent financial environment, it is essential for brands to be proactive in adapting their supply chain and logistics efforts to ensure they can weather the storm.

In this article, we explore the economic challenges facing ecommerce brands, with some essential strategies to help online retailers adapt their supply chain and logistics efforts and stay ahead.

June 24, 2023

5 mins read

Katie Riley & Elliot Taylor

Increase efficiency throughout your business

Creating efficiencies is a direct approach for brands seeking to adapt to an economic downturn.

Focusing on efficiency across their logistics and supply chain, businesses can reduce costs, improve customer satisfaction and increase profits.

Recognizing the value of efficiency for our customer brands, Ingenuity leverages a global operations network spanning 16 warehouse and fulfilment sites and over 200 courier integrations. With over 195 shipping destinations worldwide, this owned, coordinated network enables enhanced efficiency throughout the supply chain.

There are a variety of operational improvements that drive efficiency available to online brands. These include:

Optimizing inventory management to reduce carrying costs and improve order fulfilment rates.
Reducing shipping costs by optimizing shipping routes and working with logistics providers that offer competitive rates.
Automating processes such as order processing, inventory management and shipment tracking to reduce manual labor costs and improve accuracy.

A delivery person hand a cardboard box to a customer.

Negotiate better terms with your supplier network

Economic downturns are a challenging climate for any business – and that includes your suppliers.

During periods of financial difficulty, suppliers may be more willing to negotiate on price and payment terms in a bid to secure contracts and prevent customers going elsewhere.

Negotiating with suppliers can be a delicate and nuanced process – at Ingenuity, we do the heavy lifting for our customers. As owners and operators of some of the world's largest brands, our clients can access, leverage and benefit from our extensive network of essential suppliers.

Businesses can negotiate better terms by:

Requesting discounts for bulk purchases or long-term commitments.
Negotiating payment terms that align with their cash flow needs.
Negotiating lower shipping rates or free shipping for high-volume orders.

Focus on building customer loyalty

In times of financial difficulty, consumer loyalty is essential. While businesses face economic uncertainty, so too do shoppers.

With increased anxiety over rising prices, consumers are more likely to shop around to find the best deals. Indeed, when 80% of customers say that the experience a company provides is as important as its products and services, customer loyalty is key.

Faced with this environment, ecommerce brands can differentiate against their increased competition by focusing on customer loyalty initiatives.

Exceptional customer service, fast shipping and hassle-free returns, rewards programs – these can go a long way towards increasing loyalty and increasing repeat custom.

Ecommerce brands can improve the customer experience by:

Providing fast and reliable shipping options.
Offering free or discounted shipping for orders above a certain value.
Providing clear and transparent communication throughout the ordering and delivery process.
Offering simple returns and exchanges to improve customer satisfaction.

A container ship carrying a number of shipping containers sails across a blue ocean.

Consider alternative delivery models for your shoppers

As mentioned above, during challenging financial periods, consumers are typically more cost-conscious. But this concern goes beyond simply product price points and extends to the overall delivery experience.

A third of consumers tried new delivery options during the pandemic, such as home delivery or curbside pickup. These behaviors only look set to continue, today and into the future.

Ecommerce businesses can cater to this growing consumer preference by:

Partnering with local delivery services to offer same-day or next-day delivery options.
Offering click-and-collect or locker pickup options to reduce shipping costs and provide more convenient delivery options.
Providing delivery options that allow customers to choose a delivery date and time that suits their schedule.

At Ingenuity, our 24/7 warehouses are integrated directly into our courier network. As a result, we enable collections each day of the week. In eligible locations, next-day delivery is also available with a midnight cut-off.

This empowers our customer brands to offer quick, convenient and speedy delivery to their shoppers – even in an economic downturn.

Embrace innovative technology to optimize your logistics

In a challenging economic climate, technology is crucial for protecting and future-proofing your business.

Indeed, 74% of companies are planning to increase their investments in supply chain technology and innovation to improve efficiency and reduce costs.

Artificial intelligence, machine learning, and the Internet of Things (IoT) - these innovations can all help ecommerce brands optimize their supply chain and logistics operations, improve efficiency and reduce costs.

There is a plethora of options open to online businesses looking to embrace technology to persevere through an economic downturn. These include:

Using predictive analytics to forecast demand and optimize inventory levels.
Implementing automated systems to track shipments, manage inventory, and process orders.
Leveraging machine learning algorithms to optimize shipping routes and reduce shipping costs.
Using IoT sensors to track the location and condition of goods in transit and reduce the risks of loss or damage.

In challenging and changing economic conditions, ecommerce brands must be agile and flexible in their approach to supply chain and logistics to meet the evolving needs of their customers.

By increasing efficiency, reassessing their supplier network, nurturing customer loyalty, investing in innovation and embracing alternative delivery models, online brands can optimize and futureproof their logistics and operations.

With over 18 years’ experience helping our customers build, grow and expand their brands, Ingenuity understands the challenges that economic downturns can bring. With worldwide operations and logistics network, we’re the global operations partner you need to flourish, all while delivering a seamless shopping experience.

Get in touch today and discover how our global logistics services can help you succeed – come what may.

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