The global pandemic has thrown businesses into an entirely new playing field and left many scrambling to act. Retail demand has risen sharply for items like home cleaning supplies and groceries, while dropping off in other product categories, leaving companies to adjust to these shifting purchasing patterns.
Businesses reliant on global supply chains and manufacturers in greatly impacted countries face new hurdles and must seek ways to acquire the items they need. International cargo transportation options have become reduced as well, further complicating the situation. Port closures inhibit maritime shipments and air travel restrictions reduce opportunities for delivery by plane.
Companies fortunate enough to retain access to their suppliers have had to rethink purchasing practices to ensure that their vendors — especially smaller players with fewer financial reserves — are able to stay in operation and continue selling to them. That concern has prompted major companies to start paying their small vendors faster.
The “B2B Payments: COVID-19 Impact Report,” a PYMNTS and American Express collaboration, digs into how the pandemic is reshaping B2B supply chains, logistics and payments, as well as the strategies companies are using to better manage the challenges brought on by the crisis. Companies that are able to revise approaches and extract lessons from these hard times will also be better prepared to bounce back from future upsets.
COVID-19’s Impact On B2B Payments
Businesses are adopting new strategies to meet customers’ needs and build stronger client relationships during the pandemic. One cleaning supply distributor said it is drawing on lessons learned during previous public health crises, including the 2009 H1N1 and 2016 Zika outbreaks. These takeaways include increasing communication with clients, such as by expanding call center hours and providing more intensive support over the phone.
Supermarket companies are also working out new arrangements with their suppliers to be able to sate soaring customer demand. Some food providers are cracking into their inventory storages to release more items to market — such as supplies of frozen chicken — and are increasing factory hours to produce more items like hot dogs. Cleaning supplies manufacturers are also prioritizing creating the items that are in highest demand over those that are more niche.
Some factories producing essential items are adding shifts, thus bringing more workers onsite, while other companies are fortunate enough to be able to let employees work remotely. The shift to work-from-home is not without hurdles, however, and fraudsters are looking to capitalize on confusions created by the transition. Criminals are sending emails that pretend to be from executives and which instruct accounts payable (AP) department employees to send funds into bank accounts that actually belong to the thieves, for example. Businesses therefore must be on high alert.
Find out more about these and more of the latest COVID-19-related business payments headlines in the Tracker’s News and Trends section.
What The COVID-19 Pandemic Means For Logistics, Now And In The Future
Forward-looking companies can learn from the turmoil of the current pandemic and take away lessons that will help them better prepare for the next major disruption. The COVID-19 crisis has demonstrated the necessity of creating supply chains that can be flexibly adjusted, thus letting companies adapt so that an issue impacting one part of their processes does not overturn all parts, according to Brian Reed, vice president of business development and supply chain optimization at global transport and logistics company GEODIS. In this month’s Feature Story, Reed discusses the strategies and digital tools that can help make more businesses more resilient.
Read the full Feature Story in the Tracker.
Consumers are changing their shopping habits during the public health crisis. They are staying away from many public spaces — including most stores — and some are even avoiding using cash out of concern that the virus could contaminate physical objects. Many shoppers are instead going online to buy what they need, and forming new shopping behaviors in the process that might even continue after the pandemic subsides. This month’s Deep Dive examines how the current public health situation is affecting the way consumers find and buy items.
Download the Tracker to read the Deep Dive.
About the Report
The “B2B Payments: COVID-19 Impact Report,” a collaboration between PYMNTS and American Express, highlights how the global pandemic is impacting supply chains as well as consumer and business purchasing, and how companies are working to endure and bounce back.