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ECommerceTimes.com

Supply and Demand: A Moving Target for E-Tail Marketers

By Jack M. Germain
Oct 1, 2020 9:47 AM PT
e-commerce marketers challenge to match supply and demand

Marketers estimate that 61 percent of students started the new school year where they ended last school year -- remotely. So why are retailers still featuring traditional school supplies online, offering discounts and promotions retroactively, rather than using real-time data to inform decisions?

That school advertising example seems out of joint in light of the rebounding U.S. economy. It also suggests that advertisers are missing the mark in targeting consumers more effectively as the shift in both work from home and learn at home paradigms become the new normal.

Marketers have to adapt to changing circumstances. They also have to play better hunches when handling supply and demand issues. In this constantly changing marketplace fueled by the pandemic, supply and demand are moving and changing constantly.

The approach retailers take when it comes to back-to-school shopping is a strong example of how it should not be done, according to Chris Dessi, vice president of Americas at Productsup.

"Just because businesses are geared up to sell online, does not mean they are doing it in the most effective way," he told the E-Commerce Times.

Instead, advertisers should target buyers of traditional classroom shopping as two distinct groups. One group is for consumers buying supplies for those physically starting the year in schools. The other group is for those consumers who need supplies to enter a remote learning environment, he suggested.

In some instances, hybrid models have been enacted or start dates are delayed. Because of these ever-changing factors, retailer strategies just are not up to par when it comes to catering to an individual's needs, he noted.

"If you go to any major retailer's site, you will see a colorful scheme of backpacks, shoes, lunch boxes -- items that paint this portrait that life is normal, when the reality is, it is not," said Dessi.

Missed Opportunities

U.S. e-commerce is experiencing rapid growth with no sign of slowing down. Retailers and brands need to adjust their digital infrastructure and tactics as they prepare for their holiday marketing and ad campaigns, according to Melissa Sargeant, CMO of Litmus.

Brands that create authentic, personal customer experiences will emerge from the economic crisis faster and better positioned than before," she told the E-Commerce Times.

This is especially important as analysts project a roughly 25 percent drop in U.S. marketing spend. That shows a need to emphasize the value of authentic brand experiences while also maximizing budget and efficiency, she added.

So why are advertisers not fully capitalizing on the new situation? Many marketers have not yet figured out how.

"In the past, it was pretty simple to predict what supplies students need for the school year, allowing for blanket promotions and a flurry of deals. Now, it is a much more difficult situation that advertisers have never dealt with before," Productsup's Dessi observed.

Customer experience can make or break how a user views a brand. Offering irrelevant deals can be a huge turn off and encourage the shopper to look elsewhere. For instance, a parent trying to prep for three of their kids' virtual schooling wants to see deals on technology and desks, not discounts on first-day outfits, he explained.

On the flip side, some kids were excited to sport a new look the first day of in-person school. So their parents were going to buy new clothes with or without a deal. This tricky situation exists where retailers are not showing shoppers relevant products, while also leaving money on the table by offering needless discounts.

"We need to also consider the power of local advertising. Savvy digital marketers can market to people based on store locations, leveraging inventory details and powerful calls to action," Dessi said.

Each school district has different and ever-changing policies. So marketers cannot determine where their buyers are. Some school policies are changing daily, even hourly. There are too many moving parts to get out ahead of it, he suggested.

Agile Marketers Triumph

A lot of retailers' backend systems and processes for choosing products and sales are still fairly manual, according to Mark William Lewis, founder/CTO of Netalico Commerce. It is based on individuals' decisions. Plus, the supply and demand this year has been extremely unpredictable due to the unprecedented effects of the global pandemic.

"Retailers have to make predictions months in advance about what the demand will be to stock the right products due to the supply chain constraints. That is difficult to do when state and local governments are making decisions about closures daily," he told the E-Commerce Times.

Take, for example, the ongoing situation with laptops fueled by the two parallel supply and demand streams of work from home and learn at home. Few ads offered discounts and promotions retroactively.

This all comes down to poor feed management. Not enough information flows between the supplier, retailer, and customer. With laptop shortages rampant across the country, it is important for retailers to communicate inventory to their customers or else face lost sales, noted Productsup's Dessi.

"In the same vein, once retailers realized that laptops were a hot-ticket item, it would be in their best interest to ensure there are not discounts on these items. Few advertisements offered discounts and promotions retroactively, showcasing an inability to adjust based on real-time events," he explained.

The opportunity here is based on agility, he continued. The most agile marketers always win. Proper tech, supporting proper marketing is the game.

"Those who do not have proper tech implemented will dry up faster than pre-COVID-19," said Dessi.

Global attrition of marketers who are not tech-savvy is becoming apparent. It is an expedited Darwinism that will damage previously insulated brands and retailers, he noted.

"Whereas those who were already playing in the feed management and optimization space are capitalizing on the chaos, and not just beating the competition. They are eviscerating them," he quipped.

Multichannel Planning Required

U.S. online sales are up nearly 80 percent for June year-over-year and, going into the holiday season, this trend is expected to continue. This stresses the importance of brands gathering as many insights about their target audience through email to then use to inform other channels, according to Litmus' Sargeant.

If marketers neglect this part of the process in their holiday marketing efforts, their multichannel marketing plan will miss the mark. Instead, they need to invest in the audience insights garnered via email to inform the rest of the brand's marketing strategy, she advised.

"Then, they will know how to maximize their efficiency and budget," she said. "Email needs to be front and center within every retail and e-commerce marketing mix."

Marketers have to create more authentic human-to-human connections and experiences with customers. Consumers expect brands to know what they want, she added.

Informed Decisions

Adapting requires essential components for marketers, cautioned Dessi. They need real-time consumer data in order to ensure pricing models are accurate. This makes it possible for consumers to actually see the products they need.

"This is how retailers can stand out against competitors," he said. "When you are relying on online channels to make sales, you simply have to have a superb experience and exceed customer expectations."

In today's world, marketers in particular and merchants, in general, can expect more instances of unexpected, unsteady, and unprecedented changes in supply and demand. Retailers need to get ahead of that now, ensuring their feed management and real-time inventory processes are up to date, Dessi recommended.

One way to do this is to partner with the right e-commerce solution providers. Part of that includes using real-time data, which is the only way to inform backend decisions while ultimately satisfying the customer, he said.

"As more brands rightfully pivot to e-commerce, standing out against competitors is going to come down to relevance, showing customers products that are applicable to their day-to-day life, while ensuring product information is accurate and updated on an on-going basis," Dessi added.

Aggressive pendulum swings of inventory, price changes, product availability of the online world is now mimicked in the real world. They are one, he noted.


Jack M. Germain has been an ECT News Network reporter since 2003. His main areas of focus are enterprise IT, Linux and open-source technologies. He is an esteemed reviewer of Linux distros and other open-source software. In addition, Jack extensively covers business technology and privacy issues, as well as developments in e-commerce and consumer electronics. Email Jack.


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