In 2022, numerous supply chain issues have plagued people, essential services and organisations worldwide. Retailers have been hit particularly hard. Their critical role in creating accessible goods for people globally makes the impact they feel ripple throughout the supply chain. However, the nature of supply chains makes this inevitable. Their inflexibility and susceptibility to cracks in the face of minor issues due to the heavy reliance on interconnected players have set retailers up for difficulties.
Top Four Supply Chain Challenges Affecting Retailers
- Unpredictable Consumer Spending
The pandemic completely changed the previously well-known landscape of consumer spending. Worldwide lockdowns saw house-bound consumers turn almost entirely to online shopping. This drastic change disrupted the supply chain and complicated future planning. The switch between online and offline spending was out-of-the-ordinary spending behaviour, making it difficult for retailers to gauge supply and demand, and stock their virtual and physical shelves.
- Labour shortages
Labour shortages exacerbate the issues that the supply chain is already experiencing, intensifying the strain on B2B relationships in the FMCG industry. A primary symptom of the labour shortage is that it has increased the tactical workload, and retailers have deprioritised strategic conversations and planning simply because they don’t have time. This is putting a strain on the retailer-supplier relationship.
- Shipping delays and port congestion
According to United Nations Conference on Trade and Development, approximately 80% of the world’s goods are transported by sea. With shipping companies struggling to keep up with demand and congestion, retailers have been hit with delayed deliveries, empty shelves, and unsatisfied shoppers.
Inflation has severely impacted many of the costs intertwined into the supply chain. The interconnectedness of the global supply chain, not just the American supply chain, makes it such that if one thing is affected, everything is.
Collaboration is a Prerequisite to Mutual Growth
How can retailers overcome these challenges? Many of these challenges are due to government regulation, changing demographics, geopolitical factors, and other causes that retailers and suppliers solely cannot solve. However, to defend against these issues and mitigate their effects, organisations must build business-to-business relationships that create a foundation for short, medium, and long-term success. This requires a core commitment to listening and responding with empathy. It needs a more in-depth, unbiased understanding of your partner’s goals so that you can work toward your company’s objectives while seeing how helping your partner achieve their goals benefits you.
One of the solutions is customer listening. Suppliers who invest in listening find that it presents greater opportunities for collaboration. An engaged partnership empowers suppliers to achieve their company’s objectives and fosters an environment for sustainable success. Thus, what are the steps that organisations can take when strengthening their customer listening? The following questions could help suppliers analyse their customer listening and improve their relationships.
- Do you comprehend what is essential for your customer’s business?
Successful B2B relationships involve suppliers who understand what their customers want, what is vital for their business to run efficiently and the most effective way of making their product or service available. This goes beyond knowing the key stakeholders and their roles; it’s understanding the retailer’s strategy and long and short-term visions.
This deep knowledge is critical to tailoring your approach, meeting their evolving needs and providing them with value.
- Do you understand your “assets” and your “pain points” in delivering on what is essential?
Listening to a customer’s feedback about your relationship and service is walking away with a comprehensive understanding of where you’re performing well and where you need to improve. This allows you to direct support into weaker areas of your operations and leverage your strengths into opportunities for maximising collaboration. To meet your customer’s needs, you need their input. Listening to your customer gives you direction when assessing your services and systems, allowing you to improve, sustain and leverage where required.
- Do you adapt your strategy to every customer?
Every customer is different. While a retailer’s primary function remains the same, each one’s industry, market, operations, personnel, and shoppers are different. As each retailer contends with its variables, a one-size-fits-all approach to listening and negotiating will not be practical or provide you with the intelligence you need to succeed. A deeper understanding of the retailer is acquired through active listening. With time and consistent listening, you will begin to understand how to tailor your approach to extract the answers you need to meet their expectations. This can also help you with your negotiation journey. Crafting a customised strategy for each retailer allows you to account for the nuances among each customer, enabling you to develop unique tactics and behaviours to reach a win-win outcome.
- Do you listen consistently and with objectivity?
If discussions, negotiations, and listening are done without respect, understanding, and compassion, you may risk your customer’s relationships. Rebuilding these jeopardised relationships may take years.
When listening, it can be easy to lose objectivity. Focus on the customer and their point of view, and remember that feedback should not be taken personally. Retailers understand their shoppers best and know the impact of an unstable supply chain on consumers’ behaviour. If you take your organisation out of the situation, you’ll realise the valuable insight that feedback can provide.