Wake The Town
Gear Seven/Arc Studios/Shift
Contemplative Reptile
  • International Edition
  • USA Edition
  • UK Edition
  • Australian Edition
  • Canadian Edition
  • Irish Edition
  • German Edition
  • French Edition
  • Singapore Edition
  • Spanish edition
  • Polish edition
  • Indian Edition
  • Middle East edition
  • South African Edition

Elf on an Empty Shelf: Christmas Comms in a Supply Chain Crisis


Experts from Wunderman Thompson, dentsu Creative, Media.Monks, VMLY&R COMMERCE, Five by Five and VCCP share insights with LBB’s Alex Reeves about the tactics and strategies that will help brands overcome this global mess

Elf on an Empty Shelf: Christmas Comms in a Supply Chain Crisis

In our globalised economy there are increasingly no such things as ‘us problems’ and ‘them problems’. As those of us living in the West learned in 2020, when a worrying illness emerged in central China, or how small tropical islands that have never had a factory or coal power plant on them are rapidly being engulfed by the sea. 

Similarly, when headlines began to flutter across our screens in recent months about disruptions in supply chains, it wasn’t something that brands elsewhere could ignore. As the complications of Covid-19 converged with a boom in demand, labour shortages, climate disasters, poor harvests in some parts of the world, shortages in CO2, and delays at shipping ports, the many moving parts of the global supply chain have been stressed to say the least. This touches practically every business on the planet somehow.

“Right across industries there are significant issues with global supply chains, whether it is computer chip shortages holding up vehicle delivery or timber shortages slowing construction, there are challenges and impacts to people all over the world,” says Geoff Smeaton, chief commerce officer at Wunderman Thompson Australia. “Compounding that issue, what supply there is, is often getting diverted to locations that will pay more, leaving some countries and regions further challenged and goods being centralised in certain markets.” 

Businesses were already rightfully concerned, but now a new hurdle is fast approaching: the end of the calendar year, including the holiday season, as it’s called in North America - Diwali, Thanksgiving (and Black Friday), Hanukkah and of course Christmas - all crucial events for practically every brand selling a product or service. As Jon Dupuis, CEO at dentsu Creative, Americas puts it: “Supply chain challenges are very real for many clients across a breadth of verticals. The financial importance of the holiday season puts more emphasis on two critical dimensions of any client’s marketing efforts.”

The problem is hard to sum up, and agencies aren’t underestimating the support they must offer their clients: “This is a bigger situation than most of us have experienced before,” says Adrian Whitehouse, VP solutions EMEA at Media.Monks. “And the challenges run deeper than marketing alone can address with only two months to go until Christmas.”

The global crisis comes in different flavours around the world

As Adrian notes, “the supply chain issues are not affecting all sectors equally.” In the UK, most people are getting used to the fact that there are going to be gaps on the shelves in the UK this Christmas. This week will see the launch of many of the big festive ad campaigns in Britain, but the UK has an acute combination of factors conspiring to ruin its Christmas spirit. “International shipping costs into the UK have risen by as much as 10 times from Asia and other international supply sources, and many UK ports are having to turn away inbound cargo ships due to a lack of capacity. The UK is also experiencing severe labour shortages in critical roles, like factory workers on assembly lines, in food processing, and production; to warehouse staff; and finally HGV drivers,” he says.

With energy costs soaring, increasing the costs of production in the UK and around the world, and new and more complicated post-Brexit paperwork processes further slowing import and export flows for some UK companies, there’s a lot to process. “The situation is looking as bad as it has looked since the ‘70s or ‘80s. The feeling on the ground isn’t good, the issues are real and are already being felt,” he adds.

In Australia, emerging from longer and later lockdowns than most countries means the Christmas retail frenzy of 2021 is set to be even bigger than usual, predicts Geoff at Wunderman Thompson: “In particular in the key markets of Melbourne and Sydney where consumers have been left without an outlet for their physical shopping desires during these protracted lockdowns since the middle of the year. This pent-up desire to spend will create significant pressure on retailers with increased demand and reduced workforce as many staff have found other, more stable jobs. Couple that with supply chain challenges and it is set to be a period of high demand and low supply.”

The US has faced a broad selection of supply chain disruptions, driving up prices of some goods and services and leading to shortages of others, “including products that many Americans are accustomed to having readily available,” says Jon at denstu. Inventory delays are expected to affect 90% of US retailers and it now takes three times longer for cargo ships to clear ports compared to pre-pandemic timing, according to RBC Capital Markets. At the same time, dentsu’s latest US Recovery Navigator report shows that more than 70% of consumers continue to be concerned with the state of the economy, which is contributing to an increase in Buy Now, Pay Later usage of almost 50% since March 2021. “But that’s not necessarily translating to early holiday shopping behaviour,” he says. “As a recent Google/IPSOS study shows that only one-third of consumers are expecting to have their holiday shopping done by early November, which is flat compared to 2019.”  

Read the room: know the mood of your customers at this weird time

“It is going to be difficult to judge the tone of consumers as reality bites,” says Adrian at Media.Monks, “so marketers will need to be nimble in understanding the mood and projecting the right brand tone and voice.” A focus on the consumer is vital and data is key to knowing, rather than guessing, he says. “Identify all the information sources you will need and keep close eyes on them.” 

Being mindful of the scarcity of supply, marketers have to act with more “precision and context”, suggests Jon. “This is not just about campaign management, it’s about appreciating the total customer experience to ensure a heightened level of reciprocity in our efforts. People will remember feeling taken advantage of by poorly targeted messaging, misleading promotions, or perceived price gouging. They will also remember which brands acted with integrity, transparency, and support.” He also stresses that, should the mood be right, injecting some “hope and joy” into campaigns during this time of year is “key to any successful holiday campaign - given the weight of the past 18+ months, tapping into these human emotions becomes even more crucial.”

Inform customers without spreading fear

In times of scarcity, there’s a balance to find between hope and honesty. Ravi Beeharry and Andy Mancuso, creative directors at Five by Five UK, know that challenge intimately. “As we’ve seen recently from the petrol crisis, brands and retailers play a crucial role in both informing consumers but not spreading fear. It’s a fine line, whilst our 'Shop Early' campaign for the BRC last year had a serious message we made a creative decision to deliver it in a playful more humorous manner. We felt that was important. There’s no doubt we have a huge responsibility, and we can play a crucial role in getting the relevant info out there but not fuelling the scaremongering.”

Predicting scarcity needn’t be a negative though, says Michelle Whelan, CEO at VMLY&R COMMERCE UK. “Maybe there is something we can learn here from [discount retail brand] Lidl - when ‘it’s gone it’s gone’ is a tried and trusted technique. Build ‘perceived’ scarcity into product availability, turn it into an advantage and make it feel special.”

With demand likely to outstrip supply, brands who get their marketing response right stand to gain significantly. “Brands who risk outselling stock that will be flipped and resold at a higher price have an opportunity to get involved and guide the conversation,” says Adrian. “Others may steal mindshare or actual business if you can engage competitors' customer bases.”

Trust is built on transparency

With the challenges we are seeing across the supply chain, soaring costs and rising inflation, it does brands no good to ignore the realities their businesses are facing. “Brands need to be wholly transparent with consumers on all the key challenges they are facing, to educate people and manage expectations,” says Michelle at VMLY&R COMMERCE. “Especially when it comes to rising prices. People are expecting Christmas to be more expensive this year and brands are conscious that they need to play a role in helping people spend money wisely. Keeping consumers informed of what brands and retailers are doing to overcome challenges is an important shift.”

Jon warns against simplistic ‘buy now’ messaging though, stressing that the groundwork needs to be laid to ensure their experience doesn’t lead to disappointment. “With the proliferation of choice at our fingertips, a single disappointment during this time could have long-term demand impact. It’s important that brands create a heightened level of transparency in the experience to ensure the challenge during these times actually becomes a positive example of how a brand shows up, creating a long-term relationship. One example of this is work we’re doing with a financial client, reaching out to small businesses much earlier in the season than we typically would to demonstrate all the ways in which we can help them navigate the unexpected.”

Ravi and Andy at Five by Five note that their role is not just to think creatively about the problem they’re solving. “[We] can also ask these questions around stock up front and work with the client and production companies to find a cost effective solution that allows us to cover all bases... as best we can anyway.” 

Close collaboration between agencies and clients will be vital

But to find that sweet spot of offering joy without it being too jarring, collaboration between brands and their creative and production partners needs to be smooth. “Working with agencies and in-house teams can help brands quickly create and execute witty content that captures the mood - and brings valuable buzz for the brand. This increases salience and distinctiveness and that usually translates into more sales,” says Adrain. “Keep your agency close and use them for ideas, energy and support through the holiday season.”

“It is also worth remembering, in an age dominated by email and electronic communications, that an ad-hoc phone call often gets answers faster than emailing and waiting. Establishing key relationships with colleagues and partners right now might mean that you have key information or an understanding ally when things get difficult, so have a think about who you’ve been neglecting this year that you should have been paying.”

Geoff is certain that with a greater need for short-notice demands from brands, agencies and retailers alike will need to carefully plan staffing. “Teams that support brands and retailers are always busy at this time of year ensuring systems are running well and ready to handle peak loads and this year will be only greater than recent 2020 and 2019 years have been.” In Australia, he says many have been holding off on holidays whilst lockdowns have prevailed. “This means many agency staff will be looking to take additional breaks, so strong collaborative relationships and understanding between agencies and clients will be essential to ensuring both staff and client needs are looked after at this busy time.”

Advertising needs to become even more responsive

It’s too close to Christmas for brands to change their strategy, but tactical decisions are vital to navigating the rocky end of the year. “It’s going to be even more ‘all hands on deck’ than usual,” says Adrian, “and agencies need to be ready to provide extra pairs of hands to take off the pressure. Making this work will, as always, be down to good relationships and good communication. Agencies who really understand their clients and their clients' customers will be clear on what signals they should be looking for in the market and how to translate those signals into helpful tactical pivots for their clients. Brands should be working extra hard to monitor all the available data they have and make appropriate decisions to correct problems or make the most of opportunities that they’re seeing.” 

Although the vast majority of holiday campaigns will be rounded off and ready to roll out by now, agencies and production partners will be expecting plans to change according to what products are available. “Sell what you have to sell,” says Michelle. “To do this, brands will need to divert media spend out of upper-funnel, fixed-media channels into digital and social channels enabling greater levels of flexibility and speed.”

Supply chain crisis or not, an always-on mentality has been fostered in agencies since the dawn of the digital age, as Jon recognises. “The reality is that end-of-year is always an extremely busy time for agencies and production companies, across all types of media, so this is not necessarily new and we have the muscle memory,” he says. Agencies like dentsu have been laying the groundwork for the situation to shift at any time for years, with digital and social production on hand to respond as needed and production partners on hand for versioning. If there aren’t any Brussels sprouts on the shelves, they might have to be replaced by broccoli in post production. 

Anticipating shortages and developing alternative content where products can easily be exchanged is a smart and creative way to quickly manage product gaps, suggests Michelle. “Having strategies in place to offer substitutes can happen now. We don’t need to wait for shortages to happen to be able to respond. Brands who have their heads in the sand without developing alternative recommendations for shoppers will get caught out.”

Use marketing and e-commerce to push what you do have instead

Christmas is about the giving and receiving of gifts. And without all of the options on the shelves, the inspiration that brands can offer is more valuable than ever. CX-forward agencies like VMLY&R COMMERCE are working with clients to create contingencies in this regard. “Brand portfolio strategies are key to ensuring varied bundle solutions for different occasions, needs and different gift ideas,” says Michelle. “Leveraging the opportunity of bundling across ecommerce channels, when specific products are not available, recommending substitutes in real time, giving the shopper a solution and not losing the sale.”

She gives the example of Boots’ Christmas gift ideas - a familiar fixture of the UK festive retail experience: “How it is curating products, based on inspiration, affordability, but also based on availability. The iconic 3 for 2 gifts under £5, the star gift under a tenner and gifts under £25 will not only make Boots a destination for gift shopping but should give people confidence that Boots is recommending gift ideas that are actually available.”

Brands that are in the fortunate position of being able to take and fulfill orders with confidence should ‘be bold about it’, suggests Adrian. Adding that using targeted marketing and messaging to create awareness and drive sales will be fruitful. This includes both understanding the situation and communicating the positives with agility. “Whatever the impact, real-time data and communications will be critical. The brands who will do best will have the best systems and processes in place to monitor and manage their own businesses, as well as social media buzz around their own brand and those of competitors.”

In a supply-and-demand crisis, the power of marketing to create or redirect demand shouldn’t be underestimated. Jon stresses the importance of understanding this as a brand: “Balancing immediate versus future demand, which should be treated as a dial that can be nudged up or down – not an on or off switch.” 

“The challenge there is things like the retailers who want to do a big promo to push [a particular] product through a Christmas campaign,” says Rob Sellers, head of retail at VCCP. “You just don't necessarily know whether you're going to have the distribution, so the ability to plan product-led advertising is really difficult.”

It’s not just festive advertising that can be a challenge, note Ravi and Andy. Five by Five have seen supply issues affect a Black Friday campaign they’ve been working on. “Black Friday is all about great products at great prices,” they say. “So having products in our campaign has meant we’ve had to shoot twice the amount of these products. Basically a ‘subs bench’ of products waiting on the sidelines in case our retail clients face stock issues before the campaign goes live. We are having conversations with clients up front and asking about the likelihood of product availability.”

Avoid empty shelves and use physical space to reassure shoppers

Michelle warns that empty supermarket shelves are a comms problem, but they are also a media space if that opportunity is seized. “The sight of vacant shelves that normally house our household products triggers panic buying,” she says. “So, why not use the opportunity to either stock substitutes or adjacent categories in those spaces, or simply use the space to communicate to shoppers and reassure how businesses are overcoming the supply chain challenges.” 

Broad, brand advertising may be more resilient than narrow product marketing

Five by Five’s Ravi and Andy believe that the current situation allows brands to talk to their audience on something other than product and price which, they note “is important when trying to gain their mental availability.” Just watch in the next few weeks for Christmas ads that focus on emotion and humanity, rather than what products will be filling stockings.

However, Adrian notes that a big brand advertising strategy is more powerful for smaller, less-known brands, while household names who already have awareness will be able to focus on selling what they do have on shelves and in warehouses. “Smaller, less well known brands have an opportunity to cut through if their positioning as an alternative to more established brands is clear, particularly when they can supply equivalent products that bigger brands cannot provide,” he says. “Paying close attention to what is working and where the budget can be saved will be critical to success.”

Being able to react to changes is essentially, a “modern brand framework” as Rob at VCCP puts it, where a brand should be contextual, you should be able to react to events, flex across comms channels and step into culture when necessary. But brands need their houses in order first. “Retail paves the way for all that stuff,” he says. “But the brands that do that best also double down on long-term brand building, because you need to have something to be agile from, you need to have that core.”

Thinking like this will put you in good stead for 2022

Supply chain disruption won’t suddenly disappear on New Year’s Day. “Remember that this will be a particularly tough year, so we’re not going to win every time,” says Adrian. “This is the long game - we need to be able to survive through 2022 and beyond.” His advice to brands is to keep up the mode that they’re in now: “Be clear on your business, be clear on your comms strategy, and be clear on what data is really going to help you make good, meaningful decisions - and act on them quickly.

“Brands need to have a plan for 2022, not just for Christmas 2021. For industries or categories where Christmas isn’t such a big deal, then plans should already be underway for 2022. But even for brands who have a busy and profitable holiday season, 2022 needs some thought, as the uncertainty and turbulence isn’t going to end.”

Agencies are there for their clients as we look towards an uncertain year. And it’s definitely time to think in the long term, say Ravi and Andy: “What we’ve learnt in the last year or so [is that] life loves to throw up an issue / crisis / challenge just when we least expect it. But unlike other industries, this is what creative agencies thrive on, because we adapt, we work at speed, and we are innate problem solvers.”

view more - Trends and Insight
Sign up to our newsletters and stay up to date with the best work and breaking ad news from around the world.
LBB Editorial, Tue, 02 Nov 2021 14:37:58 GMT