Social media and its effect on supply chains

That we live in an ultra-connected world is no news, but for supply chain operators, the rapid technological advances in communications have brought an unexpected impact: the importance of social networks in the daily routine of the Supply Chain.

In the era of networks, inventories need to be prepared for the sudden demand for an item that may go viral due to a social media action. Likewise, networks can be the catalyst for consumer complaints due to e-commerce delivery delays and the demand for positions from the brand and/or suppliers.

The change in social and technological behavior brings the need to map out the opportunities and risks that social networks bring to the supply chain.

‍How can viral content impact the supply chain?

‍An example of viral content that affected product distribution occurred in 2023 with the Carmed Fini lip hydrant, a novelty launched by the pharmaceutical company Cimed. The product brought Cimed’s traditional lip balms with flavors of the famous Fini candies: kiss, banana, and dentures.

After going viral on social media, mainly on TikTok through influencers, Carmed Fini sold out in pharmacies and retail outlets across Brazil. According to Cimed, the expected annual sales volume was achieved in just 20 days.

The sales expectation for the product's first month on the market was BRL 8 million, but it reached BRL 40 million, five times more than projections.

This led the company to launch an operation to bring a new batch of products to market and study the possibility of acquiring new equipment to accelerate production, a clear example of how social networks and viral content can catch a company's supply chain by surprise.

Another practical case of the relationship between the social media boom and the supply chain was experienced in 2024, during the carnival season, by Editora Record and Amazon.

Portela, a traditional samba school from Rio de Janeiro, paraded with a theme inspired by the book Um Defeito de Cor (A Defect in Color), a novel by Ana Maria Machado. The emotional parade created a buzz on social networks, where the name of the book began circulating, exploding interest in the novel.

As a result, demand for the book skyrocketed, leading to stockouts both on Amazon and at the publisher Record itself, which announced that a new edition would be made available in a rush.

The case of Um Defeito de Cor exemplifies an unforeseen situation that surprised both the publisher and one of its main distributors. But it serves as a warning for the preparation and strong communication link that must exist between communication and marketing teams and the supply chain sector of organizations.

This reinforces the need to be prepared for the reality of an ultra-connected world.

‍Marketing actions must align with the supply chain

‍It is very common for marketing teams to work with the perspective of creating viral content to increase consumer interest in a product or service. However, the planning of these actions should preferably be developed in coordination with the organization's supply chain sector.

After all, if every marketing action is designed to succeed, it will be ineffective if it increases interest in a product that does not exist or whose stock is insufficient to meet the increased demand.

Thus, ideally, an organization's supply chain should be at the table along with the marketing team, discussing possibilities, solutions, and potential obstacles to sales actions. This increases the chances of success in applying strategies and reduces the possibility of an action becoming a success on social networks but a failure in actual sales.

How should the supply chain prepare?

‍In addition to good communication with marketing teams internally, the supply chain must also be prepared to respond quickly and effectively to demands in the age of social networks.

It is worth remembering that the Consumer Protection Code stipulates that the lack of a product in stock does not prevent the buyer from demanding the delivery of the item that was purchased.

Some measures that can strengthen the supply chain's response capability are:

‍Creation of a safety stock - Social networks have already shown their power to drive the retail sector, so the creation of a safety stock is a practice to be considered.

Of course, this depends on the nature of the product each company sells, as some items, such as food, may not benefit from long storage periods. However, in sectors where stocking is feasible, this creates a safety margin for operations.

‍Automating distribution centers - The acquisition of modern machinery, capable of picking orders more quickly, can also help the supply chain respond more swiftly to an extra demand caused by a viral trend on the internet.

A strong trend is the adoption of RFID-enabled stock, a method that speeds up inventory integration.

- Establishing supply and response planning - This is an element of the supply chain that has long existed but, with the Covid-19 pandemic, revealed some weaknesses. Currently, supply and response planning is being digitally transformed, with the use of artificial intelligence and machine learning, to offer greater predictive and analytical capabilities.

- Efficiency in supplier management - Fundamental in all dimensions of the supply chain, supplier management can also contribute to the agility of operations in response to viral demand.

To gain speed and quality with suppliers, CIAL360 Supplier is a platform that facilitates risk mapping with suppliers and allows for ESG evaluation of partners. It is definitely a platform that holds a central position in the scenario of challenges requiring agile responses in today's times.

‍