Viral sales and exposure: Likes and supply chain spikes

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Viral sales and exposure: Likes and supply chain spikes

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Viral sales and exposure: Likes and supply chain spikes

Subheading text
Viral exposure seems like an incredible boon for brands, but it could quickly backfire if businesses are unprepared.
    • Author:
    • Author name
      Quantumrun Foresight
    • August 31, 2023

    Insight highlights

    Viral posts or content are known to drive massive increases in product demand and supply chain challenges, known as the Bullwhip Effect. However, this strategy can result in consumer dissatisfaction, particularly if a small business struggles to fulfill this massive demand. To avoid this predicament, brands can invest in social listening and monitoring tools to track how their products are being exposed and discussed online.

    Viral sales and exposure context

    The rise of social media has transformed retail, as viral posts can cause massive increases in product demand, resulting in supply chain challenges. This phenomenon, known as the Bullwhip Effect, occurs when small changes in demand at retailers lead to larger fluctuations at higher levels of the supply chain. Examples like Nathan Apodoca's viral video causing a cranberry juice shortage and a tweet boosting White Claw hard seltzer sales demonstrate social media's power to drive demand. 

    Moreover, social media users now report shortages and shame stores that cannot meet demand, even if the shortage is beyond their control. Smaller brands face an even greater disadvantage due to longer lead times for product development and production. In early 2022, fragrance brand Phlur made a comeback, with influencer Chriselle Lim leading the way. Their first fragrance quickly gained popularity on TikTok, selling out within five hours and leaving over 200,000 people on a waitlist for months until it was restocked. 

    The high demand for the product played a significant role in Phlur securing shelf space at renowned retailers like Sephora, Selfridges, and Anthropologie. Phlur's rapid success serves as both a blueprint and a cautionary tale for brands aiming to leverage TikTok's social selling power to drive sales and reach new audiences while avoiding significant delays in fulfilling customer orders. To address these issues, digital management and software companies offer tools that monitor social media and cultural trends, enabling businesses to adjust their supply chains based on real-time information. 

    Disruptive impact

    One key aspect to consider in social media-driven demand is the changing dynamics of consumer behavior and the increasing power of social media influencers. Consumers have more direct access to information, trends, and product recommendations, presenting opportunities and challenges. Consumers can discover new products, but they also risk falling victim to hype or missing out on genuine value. It becomes crucial for individuals to develop a discerning eye and critical thinking skills to navigate the social media landscape and make informed choices.

    For businesses, the ability to monitor and respond to social media surges in real time is vital for staying competitive and meeting customer demands. Moreover, companies need to invest in efficient supply chain management, ensuring they can handle sudden spikes in demand without compromising on product availability and customer satisfaction. Viral hits highlight the need for careful planning and execution to avoid delays or controversies, which can lead to brand cancellation.

    Meanwhile, as more products achieve social media notoriety, governments may facilitate the development of regulations and frameworks that protect consumers from deceptive marketing practices and ensure fair competition among businesses. Additionally, governments can support initiatives that promote digital literacy and equip individuals with the necessary skills to navigate social media responsibly. By fostering an environment of transparency and accountability, governments can help build consumer trust in social media-driven commerce while safeguarding against potential risks or abuses.

    Implications of viral sales and exposure

    Wider implications of viral sales and exposure may include: 

    • Consumers discovering and accessing products that may have otherwise been overlooked, expanding choices and catering to diverse preferences.
    • Social media platforms offering a low-cost and accessible avenue for small businesses to showcase their products, enabling them to compete on a level playing field with established brands.
    • Opportunities for digital marketing professionals, content creators, influencers, and e-commerce platforms.
    • Social media allowing for direct and interactive communication between brands and consumers, fostering stronger relationships, personalized experiences, and improved customer satisfaction.
    • Consumers sharing information, reviews, and experiences, providing greater transparency and helping others make more informed purchasing decisions.
    • A culture of constant consumption and materialism, where individuals feel pressured to constantly acquire and showcase the latest trends.
    • Pressure on manufacturers and supply chain workers to meet unrealistic deadlines leading to labor exploitation and poor working conditions.
    • Increased resource consumption, waste generation, and carbon emissions as more products are mass-produced.
    • Politicians copying the viral strategies of brands, resulting in manipulation or disinformation.

    Questions to consider

    • How does social media influence you to buy a specific product or service?
    • How are some brands using viral content to expand their customer base?

    Insight references

    The following popular and institutional links were referenced for this insight: