Dawn Valandingham is a contributor to Supermarket News and senior vice president of retail at SPINS, a leader in data and retailer solutions for the natural products industry. She leads the SPINS Retail strategy, which includes innovative tactics around recruitment and retention of retail partners. Valandingham is also responsible for adding strategic partners that strengthen the SPINS ecosystem and reinforce its commitment to expanding and supporting the natural products industry.
The supply chain has had an eventful year and is probably giving you a sense of déjà vu right now. In March, a container ship blocked the Suez Canal, affecting one of the world’s busiest trade routes. More recently a combination of forces has slowed the supply chain across the globe. That all comes after 2020, which saw manufacturer — and subsequently retailers — scrambling to keep up with demand in the early stages of the pandemic. These issues are complex with no easy solution, but all that matters to shoppers is the ability to walk into a store and see fully stocked shelves.
For retailers, the supply chain disruption is a headache, but it is also a unique opportunity to make inroads with shoppers. I’ve had conversations with retailers who say that their order fill rates are as low as 75% — which is not something I expected to hear nearly 2 years after the start of the pandemic. While no one can say for certain when these issues will be resolved, we can all agree that simply waiting it out is not an option.
Shopper Needs and Trends Don’t Stop
During any supply chain disruption, one fact remains the same: Shoppers still need access to the products they rely on. Certain dietary restrictions — like staying gluten-free or vegetarian — aren’t flexible for shoppers with health conditions. And while dietary preferences might not always be matters of life or death, they matter enough that shoppers will seek out those products wherever they can. If not at their usual store, they’ll travel to one down the street, find it online, or go directly to the manufacturer’s site if possible.
Similarly, trends don’t stop evolving just because product orders are backed up. Consider how the pandemic continues to have long-term effects on shoppers, both due to an ongoing focus on immunity-boosting ingredients and for hybrid work schedules that are changing up meal routines. Any number of other events, like rising concerns about climate change and sustainability, could inspire shoppers to change their habits.
Customer Loyalty and Shopper Acquisition Are in Play
For retailers, the risk of losing a loyal customer is the opportunity to gain one. Each retailer needs to work hard to end up on the winning side of that equation. Customers quickly learn which stores carry the products they need and save them the time (and stress) of having to search. A supply-chain shortage can damage that relationship if there is suddenly an empty slot where a customer’s favorite item usually is. For the first time since becoming loyal to the brand, customers will seek items elsewhere and learn to rely on the store that carries what they need when no one else does. While no retailer wants to lose a shopper, another retailer has the unique opportunity to attract and retain them.
Data Lets Retailers Pivot to Alternative Products
We’ve established that this is a crucial time for retailers, but what can you do about it? Data is the answer. During this shortage — and in other instances when manufacturers couldn’t fulfill orders — I’ve helped retailers dig into their data to identify these products’ attributes and then explore the other items on the market they turn to. For example, SPINS Product Intelligence tracks product attributes that cover label claims, ingredients and nutritional information. If a retailer can’t stock their top-selling Keto ice cream, they can look at the attributes, find ready-to-ship options that have similar ingredients and nutrition, and place an order. When a Keto customer looks for their favorite item, they’ll see a stocked freezer that checks off all their requirements and saves them a trip to a competitor.
This situation also creates a chance for education and a richer customer experience. Shoppers might be wary of a new item, but in-store messaging can highlight the similar attributes — or explain why this one is better thanks to higher protein content or clean ingredients. Some retailers have even found that some alternative items come at a lower price point, which is an unexpected bonus for shoppers and another way to build trust with existing and new customers.
A seamless customer experience is the first priority for retailers, but they’re finding secondary benefits that can bolster their reputation for the long haul. If you have access to data that allows you to find products similar to the ones that are out of stock, you can keep your shelves and shopping baskets filled.