Responding to supply chain disruptions caused by the COVID-19 pandemic: A Black Swan event for omnichannel retailers

Abstract

Background: The COVID-19 pandemic has triggered unprecedented growth in digital commerce and has accelerated the digital transformation of many retailers. An unforeseen event, such as the COVID-19 pandemic, is often referred to as a ‘Black Swan’ event – being of low probability to occur but causing substantial disruptions to a supply chain. Lockdown restrictions imposed to curb the spread of coronavirus resulted in significant external and internal disruptions to retailers’ supply chains. Omnichannel retailer’s ability to respond to the pandemic’s disruption hinges on resilient supply chain strategies.

Objectives: This article explored the major supply chain disruptions experienced by South African omnichannel retailers because of the COVID-19 pandemic. Furthermore, it investigated the response strategies employed by the retailers as part of their efforts to mitigate the disruptions caused.

Method: This study followed a qualitative, exploratory research design. Data were collected through 17 semi-structured interviews with the senior managers from nine different large omnichannel retailers in South Africa.

Results: The study found that omnichannel retailers experienced external and internal supply chain disruptions during the pandemic. The most noticeable external disruption was the drastic migration of consumers to online channels and the retailers’ inability to meet demand surges. Internally, systems constraints of both front- and back-end operations were identified as prominent disruptions. In response, the omnichannel retailers highlighted the importance of being agile to unlocking investments and scale capacity, to plan for the long-term, and to make strategic decisions, fluently.

Conclusion: This article adds to the body of knowledge by being one of the first empirical studies to explore the impact of the COVID-19 pandemic on omnichannel supply chains in South Africa. In addition, this article adds to the scarce publications on the impact a ‘Black Swan’ event such as the COVID-19 pandemic can have on supply chains and possible ways retailers can react to similar disruptions in future.