Small businesses across New Zealand are facing supply chain challenges and stock shortages. Here’s how one ecommerce business and salon’s innovative responses.
At a glance
Here’s a snapshot of the advice from our interviewee:
- Wellington-based hair salon and online retailer Sable has experienced extensive product and packaging supply challenges.
- It’s shifted its thinking by prioritising email marketing and communication with its customer base.
- Staying flexible in light of circumstances out of your control is key to effectively riding the waves of supply chain disruption.
When lockdowns heavily impacted face-to-face selling channels overnight, retail and consumer goods businesses called on their resilience and quickly found alternate routes to market. Consumers responded by taking up ecommerce. Delivery networks multiplied.
Still, retailers relying on the timely arrival of stock have faced significant problems, which has continued since the very start of the pandemic as global supply chains are significantly impacted by worker shortages. In February, one in five NZ small businesses cited ‘managing the supply chain’ among the top internal barriers to achieving business goals.*
When there isn’t enough stock to go around
Sable, a hair salon and online beauty retailer in the heart of Wellington, has felt the pinch of supply chain challenges.
Although Sable sources many of its products from New Zealand wholesalers, co-owner Anthea Digby-Smith says the business has experienced significant delays when bringing in products from overseas.
Sable sources its own range of hair accessories and lifestyle products from a supplier in Asia.
“Another Italian-based company we stock normally has a three- or four-month shipping time, but we have seen that double to eight months,” Anthea says.
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Sable’s biggest challenge has been coping with delays from an American wholesaler which supplies retailers in both New Zealand and Australia.
“We have found that even though they have ordered quantities to supply salons in both Australia and New Zealand, they are limited to smaller shipments,” says Anthea. “Australia tends to keep most if not all of the stock. When there is enough stock to go around, the container arriving in New Zealand is delayed.
“Products also have closer expiry dates, which makes me think suppliers are buying more and holding the stock longer – so when it comes to our shelves we have to move it quicker. Christmas packs are arriving after Christmas, and are now being offered as Mother’s Day specials.”
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Strategies to stay connected with customers
Such delays are common, and not only limited to Sable’s line of products, but reflect a trend observed across the industry.
“We see companies now doing yearly product calendar releases, rather than quarterly releases,” Anthea observes. “We don’t seem to be benefiting from releases of new products within two to three months of the parent company launching. These are now six to 12 months later.”
By necessity, Sable has adopted strategies to mitigate the impact of a volatile supply market, starting with optimising the stock on hand and utilising technology such as email marketing to stay connected with customers. After all, without a satisfied consumer base there’s no business.
“We now stock up to three months’ worth of our biggest-selling ranges and products,” Anthea says. “We are ordering multiple times a month, using EDM to keep customers up-to-date with restocks and offering pre-orders on upcoming stock.”
According to Anthea, Sable’s long-term planning has undergone a shift as well – it now relies heavily on forecasting reports and close communication with supplier networks.
Anthea’s top tips for managing stock and dealing with suppliers
Supply chain uncertainty usually means that businesses often need to think outside the box to stay operational and maintain growth. As retailers across the country make plans to try to deal with a volatile and unpredictable supply chain, Anthea offers her recommendations for dealing with change and getting back up to speed:
- “Invest in a great stock management tool. You can easily see when you are getting low on stock and which products are surging in demand.”
- “Ask your suppliers why certain items are out of stock. Some out-of-stock items are due to packaging delays, so we will receive the stock unboxed or without the additional sleeves. Our customers are more than happy to have their products unboxed.”
- “Use EDM for back-in-stock notifications, pre-orders and restock releases. But also remember that sometimes things are beyond your control.”
*’Understanding the priorities and financial needs of small businesses’, One Picture and Prospa, February 2022.
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