Supply-Chain Disruptions Present New Opportunities for CPG Brands

Meghan Howard is the VP of Sales here at Chicory, the contextual commerce advertising platform.

Supply-chain disruptions and inflation have dominated industry headlines for months. Despite heightened concern, the disruptions we’re navigating didn’t manifest overnight. They started at the beginning of the pandemic when large manufacturing cities were hit hard by the coronavirus. There was a reduction in workforce and factories closed or slowed production, causing shipping companies to cut their schedules. Meanwhile, demand for certain products, especially CPG products, skyrocketed.

While the lasting impacts of these events have rightfully caused concern across the industry, there hasn’t been enough discussion about how brands can use these changes in the supply chain to their advantage. Supply-chain changes present new opportunities for brands to participate in competitive conquesting, as well as to promote product swaps and explore new acquisition strategies. As product availability and price concerns persist into 2022, CPGs need to be focused less on mitigating and more on maximizing.

Below I outline my shortlist of recommendations for CPGs looking to capitalize on current conditions.

Return to Competitive Conquesting

Consumers right now want to know where they can get their go-to items. As a brand, it’s your responsibility to let them know that you have what they’re looking for. After navigating the busiest part of the year, you likely already have a good understanding of your current inventory. Now, it’s time to shift your focus away from the inventory you’re lacking and toward how the inventory you do have can put you at an advantage. 

This is where visibility into distribution becomes critical. Do you have inventory your competitor doesn’t have? Is your inventory available at more or key locations and retailers? Do you have higher quality inventory, or more affordable inventory? If your answer is “yes” to any of those questions, then you should participate in competitive conquesting, where you place an advertisement for your product where your competitor’s offering is mentioned, or where a shared product is mentioned.

If a digital recipe calls for butter or your competitor’s butter, you should be advertising your available butter in that recipe content. This allows you to practice geo or store-level targeting, letting readers know that you have the product they need, when and where they need it, at the quality or price they’re looking for.

Plan for Product Swaps

A product shortage is concerning for consumers and brands alike. Unless, of course, your brand offers a product that can be swapped for the one in short supply. Your brand can take this opportunity to communicate the benefits and uses of your alternative product to consumers, driving trial and earning new business. If there’s a chicken shortage, for example, then this presents the perfect opportunity for pork, beef, seafood and meat-alternative brands to advertise a product swap. After all, 80% of shoppers are likely to repeat previous grocery shopping orders, making it a priority to try to get into a shopper’s cart when you have the inventory available to win. 

You can also encourage product swaps among your own line of products. If your most popular pre-packaged meal or flavor option is in short supply, consider pointing people toward an equally satisfying alternative. The shopper will benefit from discovering a new product, and your brand will benefit from the increased product exposure and ability to test product fit.

Embrace Contextual Commerce

During times like these, consumer trust and loyalty are of the utmost importance. So, what’s the best way to earn it? By serving as a resource for consumers — educating them on the benefits of your products and offering convenience and flexibility where they need it. Contextual commerce strategies, which allow consumers to shop while engaging with relevant content online, are the perfect solution for this.

For CPG brands specifically, recipe content is the ideal contextual commerce opportunity. Recipes have historically served as a guiding force for consumers, helping them meal plan on the fly and adjust to current product availability. In a consumer survey conducted by Chicory, 83% of respondents reported using recipes to prepare for shopping trips. Leveraging contextual commerce advertising tech within recipe content, brands can reach high intent shoppers when they’re primed to buy, and where the product is in stock, ultimately maximizing ad spend.

With so many moving parts, the supply chain is a delicate system — arguably, more delicate than most consumers, and even businesses, realized. The modern marketer therefore must be appropriately prepared to navigate potential disruptions. Instead of losing marketing momentum, CPG marketers should look for the opportunity in shifting circumstances. A difference in supply chains can work to their advantage, even helping them lean into new and evolving consumer preferences.