At the turn of the year, Chris Burrows, Head of Sales for Distribution and Smart Security at ERA, reflects on the challenges and opportunities faced by the merchant sector over the last 12 months and discusses the learnings that can be applied as we move into 2022.
I’m sure I speak for the entire industry when I say 2021 has been one of the most challenging years we’ve ever experienced. Every area of the sector has been significantly impacted by the repercussions of the pandemic, which have created supply chain issues on an exceptional scale.
The continued shortage of raw materials and their subsequent increase in cost, combined with the significant rise in demand for product and ongoing freight shortages, has created a severely strained trading environment for all. This was compounded by the rapid acceleration in home improvement spending, which far exceeded customer demand forecasts and exacerbated product shortages across a wide range of categories.
However, by working together, manufacturers and merchants have turned the tide to ensure supply of product, wherever possible. As a result, we have created new collaborative ways of working, which place us all in a stronger position as we enter 2022.
At ERA, we have taken steps to build better and more robust supply chain processes that improve product availability, now and in the future. This has enabled us to support our merchant network in capitalising on the opportunities created by the home improvement boom.
We have been able to take tactical decisions across product categories experiencing the highest levels of demand to optimise supply. For example, significant investment in sea, air and rail freight has been undertaken to ensure our customers have the levels of stock they require, in the shortest possible lead times.
Looking ahead to the new year, demand looks set to start to return to more normal levels. This will provide merchants and manufacturers with a vital opportunity to further re-evaluate their operations to forward plan and identify new and more efficient ways of working, whilst also meeting upcoming legislative requirements.
This includes complying with the government’s Plastic Packaging Tax (PPT), which will be enforced from April and will impact around 20,000 manufacturers and importers of plastic packaging. Levied at £200 per metric tonne of plastic packaging that contains less than 30% recycled plastic, the new tax has significant implications for merchants who import over 10 metric tonnes of plastic throughout a 12 month period.
In preparation, ERA has been working in partnership with its distribution network to review its packaging options and ensure the minimum threshold is met, without compromising on quality. This is a commitment we will continue to honour throughout 2022 to assist merchants in meeting these new requirements.
It’s safe to say this turbulent trading environment isn’t over yet, but by working together and implementing strategic decisions based on the needs and feedback of our customers, we can continue to evolve to create a more efficient, sustainable and successful sector for everyone.
For further information on ERA’s diverse portfolio of security products, including its smart home offering, visit www.eraeverywhere.com
