Peak Season Supply Chain Challenges of 2022 eCommerce Retailers Need to Know

A study by Wharton School's Baker Retailing Center and First Insight revealed that 98% of surveyed retail executives are experiencing supply chain issues as they go through the holidays. All the respondents said supply chain disruption would significantly affect the upcoming peak season order fulfillment. The challenge might last throughout 2022.

Several supply chain issues will challenge eCommerce fulfillment services this holiday season. They include:

1.      High Inflation

United States annual inflation accelerated to 9.1% by June 2022, the worst record since November of 1981, leading to a hike in prices of essential resources such as oil and gas to hit an all-time high. The global annual inflation rate is estimated to be approximately 6% by Christmas, making 2022 Christmas season inflation higher than in 2021.

High inflation will cause eCommerce retailers to struggle with eCommerce order fulfillment because the costs might be higher than in previous years. Due to lengthy shipping delays, eCommerce retailers will have challenges in keeping up with their order fulfillment services.

Shoppers are likely to avoid online shopping to reduce their holiday expenditure. With reduced online buyers, eCommerce retailers are likely to have fewer inventories.

2.      Supply Chain Disruptions

Adding to their inflation woes, eCommerce retailers will face increased odds of holiday gifts getting out of stock and arriving late. While the odds are not as severe as last year's holiday season, the supply chain constraints will threaten eCommerce production and delivery.

Experts predict a season of more expensive holiday products. That's because the efforts businesses are taking globally to improve supply chain strategies, such as workforce and technology investments, will push up costs.

3.      Extended Holiday shopping Duration

As we approach the holidays, customers will be looking to start their Christmas shopping as early as July. They want to have their presents early to avoid falling prey to possible shipping delays and increased costs.

Ecommerce retailers will also be eager to capitalize on early shopping. So, they'll start extending their deals, such as Black Friday, for over a week.

What Can Ecommerce Retailers Do to Cope with the Challenges?

With so many supply chain challenges, eCommerce retailers must reinvent themselves with strategies to counter the holiday shipping disruptions and remain afloat. They can:

Counter Increasing Carrier Costs

Carriers imposed holiday surcharges in 2020 and are likely to extend to 2023. In 2021, parcel shipping prices increased by approximately 5%, and experts estimate another 5% increase in 2022. An increase in international and cross-border shipping might range from 8% to 12%.

There isn't a quick fix for the high costs, so eCommerce retailers should look for opportunities to mitigate excessive expenditure. Ecommerce retailers can look for opportunities to open up new ship locations or consolidate existing ones to cut costs. Finding new ways to account for carrier increases without simply passing the costs to the buyers is critical for maintaining a positive customer experience and hitting your sales target.

Open Up More Communication Avenues

Consider opening up more communication avenues to reach your managers, current staff, customers, and partners in the shipping network. Supply chain disruptions will be constant in most industries. Still, consistent communication can stimulate creativity for more solutions to enable everyone to remain on the same page to counter these abnormal periods.

Don't Treat Staffing Issues as Standard

Labor shortages affect all sectors of the global economy, most especially the logistics department. Most logistics and carrier companies struggle to honor all their service-level agreements and adjust to their client's changing business needs because of staff-related issues.

If such situations impact logistics partners, eCommerce retailers should consider changing their supply chain strategy. New strategies can include changing partners, modifying trade patterns, and consolidating inventory locations. Doing so can maximize their ability to live to their shopper expectations while minimizing costs and other adverse business impacts.

Forecast Your Customer Behavior

It's impossible to run a fulfillment network efficiently if you can't determine your customer's wants. It's paramount to understand your client's needs. Before the peak season arrives, observe and analyze the consumers' needs thoroughly. Put up a buffer at the warehouse to cater for any possible error of margin.

You should constantly monitor the consumers' reports to forecast the trends in demand and supply during the holiday season. The information will help you to understand which products will be in high demand and which will take up most of your eCommerce order fulfillment services.

Overcoming Supply Chain Challenges

Online businesses and eCommerce retailers can benefit from partnering with ShipNetwork before the holiday season starts. You can take advantage of 3PL shipping software solutions for a 1-2-day ground delivery network, 100% Flawless or Free order accuracy guarantee, and our revolutionary order fulfillment services.

Partnering with 3PL logistics providers can be an added advantage because of our expansive and comprehensive shipping and fulfillment network. Your business can focus on staying ahead of the supply chain challenges this holiday shopping season. Check out our Xparcel offers for the lowest shipping costs.