‘It’s influencing media plans’: the supply chain headaches for big Christmas advertisers
Major retailers are rethinking their Christmas advertising plans amid warnings that the driver shortage and fuel crisis will impact product availability and delivery over the festive season.
The warnings to Christmas shoppers have been coming thick and fast. The chief executive of Next stressed on September 30 that the UK labor shortage will cause “degradation” to its services this year. UK business secretary Kwasi Kwarteng has said that despite efforts being made, there will be “no guarantees” the problems will be resolved by Christmas. Elsewhere, Tesco, Amazon and Yodel have all warned that product supply and delivery in the lead-up to Chrismas will affect what and when consumers can buy.
Christmas adverts have been hit by supply chain woes
According to a survey by Sitecore, the headlines of a Christmas ruined by the driver shortage have led almost half (48%) of consumers to begin shopping earlier, with 28% having already started. Despite the pandemic resulting in a mass shift to e-commerce, a significant portion of respondents (45%) said the current uncertainty means they plan to avoid big online retailers and instead shop locally and in-store.
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In response, retailers used to spending big budgets on their Christmas advertising are reworking campaigns to ensure that the messaging aligns to what they can deliver.
“The current situation is definitely influencing media plans,” says Liam Brennan, global lead consultant at MediaCom Blink Consulting.
Most major brands will have planned, shot and booked their hero Christmas TV ads by the summer. Reports have suggested that there was concern early in the year among retailers that the driver shortage could impact the supply chain. And so some may have tailored comms accordingly – opting to move away from any product-specific TV ads to instead focus on brand messaging.
Brennan says it’s digital executions that are currently being reworked. “[It’s changing] placements near the point of purchase such as digital display, search and proximity out-of-home,” he explains.
Michelle Whelan, chief executive of VMLY&R Commerce – the WPP agency specializing in retail – said that brands have also opted to start advertising earlier, pushing to start the Christmas trading period sooner rather than later to avoid supply disappointment.
Online retailer Studio, for example, launched its Christmas brand ad campaign voiced by actor and TV personality Joe Swash last week.
“Retailers and brands who do have control over their supply chain, in particular own label, will push the reliability of their supply chains hard,” she says of the tactics some advertisers could take this year. “This will require absolute confidence in their ability to deliver and we’ll see more of this at hyper-local levels.”
Rob Sellers is head of retail at VCCP, which counts Cadbury and Walkers among its clients. He suggests the call-to-action message on any Christmas communications will also need to be easy to adapt depending on stock levels at any given point.
“If you’re a retailer thinking about Christmas communications, it might be, ‘how do I convince people to come into store to collect?’ Because at least then it cuts out one link in the chain that relies on drivers,” Sellers says.
All of this sounds, on paper, simple. But media planners being able to act on product availability information is still largely reliant on clients manually updating agencies with sales data.
“This information gap is shrinking though with the growth of e-commerce, particularly with brands who own their own .com store and control their supply chain,” explains Brennan.
“Situations like these (and the pandemic) are promoting more of a behavior change within agencies, and how marketers work with their sales team to be more ‘real-time’ in how they plan their media, attribute to sales data and use data signals to personalize their messaging – ‘digitization’ of their media and marketing.”
In future, Brennan says the planning cycle for big events like Christmas will likely still start months out, but the actual activation buying may be more fluid, with many decisions made at the last minute and media and messaging optimized around the data that is being passed during the sales period.
Paddy Earnshaw, customer director at B&Q, is at the sharp end of these discussions. The retailer has just launched an ad campaign that will see it through the festive period.
"We need to make sure that investment is going into the places where you have availability. We need to be agile. We’re pretty quick on it, we can move ads around and switch, certainly on trading," he said.
"And we’re always listing to make sure there’s no risk of being irresponsible. We typically don’t work in a category where it’s a concern but I imagine for the food retailers there’s a concern about what they’re engendering."
One category it does lead on is the sale of faux Christmas trees. But supply issues mean it likely won't have as many on the shelves as previous years.
"There’s enough trees to go round, but there will never be more demand for 'living' trees," he says. "That’s a good example of agile campaigning – everyone has to have a tree if they want one. So how can we help people realise there’s still a choice? We're finding a role to play in that."
Supply chain issues aside, VLMY&R’s Whelan said the bigger challenge brands are experiencing right now is the rising cost of goods as materials and ingredients are more and more expensive. Managing a positive P&L is leading to cuts in advertising and marketing spend. She predicts turbulation in the months ahead.
“As a result of both supply chain and cost of goods challenges, we’ll see a consolidation and reduction of product portfolios, with brands really focusing on placing the right product in the right channel.”