Supply Chains Are Snapping—and So Is Consumer Patience

Retailers are grappling with supply chain chaos and cautious consumers, putting pressure on revenue and resilience.

For retailers, the road to growth has been bumpy, with supply chain chaos, inflation, labour shortages, and shifting consumer behaviour. As the cost of living climbs, shoppers are tightening their belts. Customers are spending cautiously, delivery timelines are unpredictable, and that once-loyal customer is now price-comparing on three tabs.

Add to that the fact that even the savviest inventory strategy can crumble if one factory overseas stalls or one port gets clogged, and it’s no wonder retail margins are thinner than ever. 

So, what’s really dragging down performance? 

Cost-of-Living Crisis is Disrupting Retail Revenue 

Research from Fluent Commerce, a provider of distributed order management system (OMS), Fluent Order Management, shows that the cost-of-living crisis is the biggest challenge facing 56% of retailers.

“Buying behaviours have evolved, with consumers now prioritising essential purchases over discretionary spending. This shift is prompting retailers to adapt their strategies to remain aligned with their customers’ needs,” says Rob Shaw, GM EMEA at Fluent Commerce.

“At the same time, businesses are navigating increased operational costs, including recent rises in national insurance contributions. While these changes present challenges, they also underscore the importance of innovation and agility in today’s retail environment.”

The survey underlined the fact that supply chain disruptions have continued to be a headache for retailers over the last few months. One fifth of retailers named the threat of US trade tariffs as one of their biggest current challenges. Ongoing issues like the Panama Canal disruptions have impacted four fifths of retailers, with 8% of respondents labelling these disruptions as ‘severe’. 

When asked about the biggest concerns stemming from these disruptions, 30% said having to incur higher costs due to rerouting orders, 28% noted having large amounts of stock unavailable online, and 27% were concerned about having to increase prices due to rerouting orders.

Opportunity to Boost Supply Chain Resilience

However, these challenges have offered an opportunity to boost supply chain resilience. In response to these complications, 26% of retailers have looked to make their supply chain more resilient, with over one fifth already implementing changes. 

To do so, 43% retailers looked at diversifying their suppliers, and 43% looked into sourcing goods from local suppliers. 31% also explored re-routing goods through safer but more costly routes. 9% said they hadn’t yet looked into different sourcing or fulfilment options but might do so if disruptions continue. 

According to the survey, another key pressure facing today’s retailers is keeping up with new technologies – with 36% of respondents naming this as a key challenge. Diving into their specific technology pain points, one third of retailers are concerned about implementing new technologies like AI and 32% said delivering a seamless omnichannel experience. 

Inventory Visibility Plays Key Role

Only 28% of retailers said they had real-time inventory visibility across their supply chain – a drop from 45% in 2024. Poor visibility is causing problems for 68% of retailers, with 29% saying it caused significant problems. Over a third also noted that poor inventory visibility made it challenging to deliver on customer experience.

“Retailers are navigating a rapidly evolving technology landscape, and one of the most pressing challenges is gaining better visibility into their inventory. Without real-time data, it becomes increasingly difficult to deliver the kind of seamless, responsive customer experience that today’s shoppers expect. The drop in inventory visibility from last year highlights just how crucial this area has become,” Shaw says.

“Now more than ever, it’s important for retailers to step back and assess how their inventory is managed and shared across systems. Having a clearer view of what stock is available – whether in-store, in transit, or in back order – not only supports better customer communication but also helps avoid common pitfalls like overpromising or missing delivery expectations. This isn’t just about technology for technology’s sake. It’s about enabling smarter decision-making, building resilience into operations, and ensuring retailers are better equipped to handle uncertainty,” he adds.

When asked about their leading strategic priorities for the next five years, investing in new technology remained the top priority for 62% respondents. Other priorities were investment in product innovation (34%), sustainability initiatives (34%) and expansion into new markets (29%).