Thought Leadership

the effect of the supply chain crisis on consumer shopping behavior

Nov 30, 2021

The pandemic has no doubt irrevocably changed the way consumers live, work, and shop. We’ve observed countless changes in consumer shopping behavior since the dawn of the coronavirus – beginning with panic-buying food and necessities to an unprecedented increase in the adoption and reliance on eCommerce across categories from beauty and personal care to grocery. Retailers and brands have had to adapt to the changing behaviors to stay relevant and competitive, driving the implementation of new shopping technology such as virtual try-on, Buy Online, Pick Up In-Store, and beyond. With these changes came a surge in demand and rise in consumer expectations that crippled supply chains and in-turn affected future buying behaviors.

Skyrocketing demand chokes a lean system

After the initial dip in consumer spending experienced during the uncertainty of the early pandemic, the combination of government stimulus checks and vaccine rollouts drove a balloon in consumer demand and spending. The newfound reliance on eCommerce also fueled consumer expectations for ease of ordering, guaranteed product availability, and fast shipping.

This extraordinary increase in demand and online spending among other pandemic-related disruptions resulted in a supply chain crisis as a system weakened by labor and shipping container shortages, congested ports, and over-stretched manufacturing sites struggled to support new buying habits.

Global supply chain systems long operated on the notion of “just in time”, an efficient methodology that kept inventory slim by delivering parts to factories right as they were required, minimizing the need to keep a large inventory. This lack of inventory, among other factors left supply chains vulnerable to the sudden increase in demand leaving them scurrying to keep up and resulting in stock issues and price increases across categories that we continue to experience.

What do tangled supply chains mean for consumer shopping behavior?

We know that changing consumer shopping habits in part are responsible for the supply chain crisis, but you might also be wondering how this combination of increased demand and a weakened system in turn effects how consumers will shop moving forward.

We’ve found that the supply chain crisis has not affected how much consumers will buy but rather has affected how they plan to do their shopping.

In response to the crisis, nearly all consumers plan to change their buying habits and almost half plan to shop early for gifting holidays.

How will retailer and brand loyalty fare during this time?

Consumers in higher numbers now understand the global supply chain and the implications of the crisis and are concerned about securing the gifts on their lists. With this knowledge, they plan to shop around if they cannot secure their items at their usual retailer, with 44% of consumers stating that they will consider new retailers they are familiar with and 23% are open to new retailers even if they’ve never heard of them before (TransUnion).

Beyond retailer choice, consumer concerns about stock issues has 25% of consumers considering alternate gifts (TransUnion), an opportunity for brands and retailers to tout their products and availability to meet new consumers and gain their loyalty.

How can brands prepare for the upcoming barrage of shopping holidays in EOY 2021 and 2022?

Early Messaging + Promotions

In order to capture consumers who will be shopping early for the next round of key holidays in 2022 – Valentine’s Day, Easter, Mother’s Day, and Father’s Day, brands and retailers alike can roll out holiday messaging and promotions earlier than ever. By promoting earlier and perhaps for longer, brands and retailers can avoid stressful and frustrating snafu’s for both themselves and consumers – like shipping delays and out-of-stocks caused by flash promotions and last-minute purchases.

Digital Sampling

Implementing a strategic digital sampling strategy around key holiday periods can have three positive effects

1. Seed marketplace early and prime for gifting
Retailers and brands can seed the marketplace through digital product sampling campaigns. By pre-sampling to target consumers in the months and weeks ahead of a holiday, you can drive brand awareness and affinity and prime consumers for gifting purchases. This strategy allows consumers ample time to learn about your product and make the decision to convert

2. Alternate gifting – convert users of competitive products
With loyalty on the line due to potential stock issues, sampling keeps your product top of mind if a consumer’s first choice isn’t available, offering an opportunity for an entry point to converting consumers of competitive products.

3. Price Increases – Influence on-the-fence consumers
While price increases may become inevitable in the near future, sampling your product may give on-the-fence consumers the push they need to convert at a higher price point.

Interested in learning more?
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