Macroeconomic Headwinds Affecting Ecommerce - Episode 208
INTERVIEW WITH AARON CONANT
DESCRIPTION
This week on the Ecommerce Braintrust podcast, Aaron Conant of BWG Connect is back on the show to continue the conversation we started last week. In this episode, we’re discussing macroeconomic and supply-chain headwinds in terms of the US economy and retail spending, as well as new marketplaces and retail media platforms.
Make sure to tune in to find out more!
Aaron is a Co-Founder and Managing Director of BWG Connect, a networking and knowledge-sharing group of thousands of brands who collectively grow their digital knowledge base and collaborate on partner selection. Aaron talks to 1,200 brands a year and hosts 250 in-person and virtual events with industry professionals. Prior to this Aaron was Head of eCommerce Sales at Perrigo, where he helped launch their Amazon business as well asD2C and B2B websites. Aaron began his career doing synthetic organic chemistry at Pfizer.
“When there’s less money to be spent, people are looking for deals. And yet, when I’m talking to brands right now, if you can sell out of all your inventory, why would you put anything on sale?”
KEY TAKEAWAYS
There was a lot of money being used in digital purchases after the stimulus checks were received, which in turn meant a great month-over-month growth during the pandemic.
In springtime it seemed like people had bought everything they wanted to buy, so they started turning to experiential things like traveling. People are also going to work so they have less time to spend their money. In some cases, they also have less money coming in.
It was believed the supply chain issues were going to be worked out by now. However, it seems like it will be at least a year before they do.
Heading into Q4, there is less money to be spent but also less inventory to be bought. People are looking for deals, but why would brands put products on sale?
Kiri wrote about last year’s supply chain disruptions in a piece for Forbes. Another current issue are the storage limits set by Amazon.
Amazon doesn’t want their fulfilment centers to be long-term storage warehouses. They want to stock fast-moving products, so sellers are having problems with maintaining their inventory. Amazon’s algorithm doesn’t just affect prices, but shipping and storage as well.
There is a shortage of warehouse workers for Amazon, so there is inventory that’s been ordered but can’t be sold because it hasn’t been unloaded.
One way to solve this issue is to update your ERP system and set up your DtC shipping. Another solution are digital-age 3PLs that have an automated process and actually allow for cost savings.
There is a major hesitancy with Walmart on a digital side across the board, though brands are looking forward to an alternative to Amazon.
When 60% of a brand’s online sales are on Amazon, they get uncomfortable with their reliance on that platform.
Walmart needs to be a partner for brands, which is not something Amazon does.
The paradox is that business is growing quickly as a percentage of sales, but it can be less profitable depending on a lot of factors.
Due to supply chain issues prices should be going up, but they haven’t so far. One explanation is that there is a backup of inventory and not much demand.
In terms of new marketplaces and retail media platforms, the biggest concern for brands is where to spend money. Companies’ media budgets with amazon are being trimmed. They are focusing on returns from ad spend.
There are a lot of ways to get customers to brands’ websites and try to keep their business.
MENTIONED IN THIS EPISODE
Connect with Kiri Masters
Learn more about Bobsled Marketing
Connect with Aaron Conant
Learn more about BWG Connect on LinkedIn
On October 19th at 11 am EST, Bobsled Founder & CEO Kiri Masters will be hosting a very insightful webinar about 7 of the most important challenges ecommerce & digital leaders of omnichannel brands will face in the coming year.
