It’s Already Broke, So Let’s Fix It!

4 min read, April 29, 2022
Victoria W., Jane L., Osama A., Michelle C.

Photo: Sandy Clarke, Unsplash

Across the country, shoppers have been noticing and documenting on social media the empty shelves in their local stores. Retailers have been doing their best to address this byproduct of supply chain disruptions with varying degrees of success. In our previous article, we detailed the many causes of the supply chain dilemma and how some companies are trying to ease the strain with strategies targeting their backend operations.

Most companies don’t produce their own goods—that’s why the supply chain exists, with all its moving pieces of manufacturers and middlemen and transport and warehouses and more. And the more moving pieces there are, the more opportunities there are for things to go wrong. There are even reports of some companies who, lacking supply chain risk management, were unable to find the contact information for their own suppliers amid the pandemic.

The current state of the supply chain is also hindered by near monopolies. McKinsey reports that in the last decade alone, 5 ocean freighting companies increased their control of the industry from 46% to 65%. In addition, retailers have long since looked to Asian countries for the cheapest business solutions, resulting in a geographic concentration of manufacturing facilities. It’s easy to see how such concentrations of resources can result in major breakdowns—in China’s Yantian port, the fourth largest port in the world, local COVID-19 outbreaks forced work to “[decrease] massively” and forced companies to reckon with the possibility of a whiplash effect to these delays. Scale mismatches also play a role. Where a few decades ago, the average container ship held 2 to 3,000 containers, the average ship now can hold tens of thousands of containers. Once arrived at their destination country however, the rest of the transportation chain may not have the infrastructure needed to handle that volume of product.

It’s a situation that’s near impossible to solve because the very structure of the supply chain is riddled with opportunities for things to go wrong. Normally, companies would be able to find a solution at another point in the commerce journey, whether through marketing or merchandising, and it’s often a matter of reallocating resources and manpower. But sometimes it seems that everything goes wrong, everywhere, all at once.

Despite these problems, no one wants to go down without a fight. Bigger retailers can afford to absorb some of the risk. In cases such as Walmart, Target, Macy’s, they can choose to opt for more expensive transportation options, such as shipping by air, because they have a larger profit margin to work with as opposed to smaller retailers. Companies wise to the monopolies are also sourcing inventory from multiple suppliers and playing with the balance of longer term contracts and smaller order sizes to score more advantageous prices.

All of these backend strategies go hand-in-hand with in-store merchandising efforts. Sometimes the burden falls on store managers to make shelves look as full and attractive to shoppers as possible. Some of the oldest tricks in the book include “facing up,” moving products up to the front of the shelf to hide the empty space behind. Lately, we’ve also seen shelves being filled with unrelated products from different departments, or aisles and shelves reorganized to avoid empty spaces. And unfortunately, some weary souls are plain giving up, putting up cardboard signs that let customers know that there is nothing to be done about the lack of products.

But there are solutions if you know where to look. As one of our clients for 28 years and counting, when HP let Beeline know of their struggles with inventory disruptions and fear of losing their valuable shelf space within Staples stores, our retail team got to work on the creative for a shelf wedge.

Image: Beeline, HP corrugate display

Whether shopping online or in stores, customers always want to know they’re getting the best bang for their buck, no matter how they personally calculate it. Brands that do well to inform and educate their customers are rewarded with a higher level of trust and more satisfactory transactions. Out of the many types of point-of-purchase solutions, the shelf wedge is ideal for HP’s needs in this situation. The footprint of the wedge is perfectly sized to fill a merchandising hole in the retail area, and the content informs customers about HP’s Instant Ink program, highlighting a special 6-month offer pertaining to the physical, in-stock products right next to the wedge. The angled face makes it easy for shoppers to read without bending down or squinting, and it’s also equipped with a brochure holder for more take-home information.

A similar but more robust example is our HP Sprocket solution for Best Buy. This time, the slanted face was reworked to a shallower angle, still permitting easy legibility, but also accommodating three demo units to be part of the display. This eye-catching display captures the aesthetic of the young Sprocket customer, while detailing the different advantages of each separate product in the Sprocket line. We finished the display with a 7” video monitor.

Image: Beeline, HP Sprocket display

Clearly, creative merchandising can help solve the contemporary problem of low inventory, but it’s always been a great tool for brands and retailers. When used as efficient informational tools, these merchandising elements do the work for you, without requiring extra training for salespersons. And unlike traditional media, point-of-purchase merchandising appeals to customers at the point of purchase. Shopkick, a shopping rewards app, reported an 82% of consumers are more likely to purchase when they’ve interacted with something in store, as in the case of our demo Sprocket display. Even for Gen Z, over 50% purport to using in-store shopping as a welcome way to disconnect from their digital environments, with 83% of those respondents saying they actually prefer to complete the purchase in store.

NielsenIQ’s recently launched On Shelf Availability barometer found that retailers in the U.S. lost out on $82 billion in sales last year due to unavailable items. When this happens, some shoppers choose to postpone their purchase or buy online, while 10% choose to go to another retailer. Rather than allow that to happen, brands and retailers must look for opportunities to “visually stock” their shelves with compelling POS merchandising that informs and educates shoppers. Upselling, suggesting alternative options that are actually available, or rerouting shoppers to a nearby location can all help to mitigate the challenge of empty store shelves. Our team at Beeline is certain that with a little creativity, an empty shelf can continue to do the selling for you. Learn more and connect with us at beelinegroup.com.