New Report: 98% of Shopify Merchants Have Difficulty Aligning Inventory and Production with Changing Consumer Demand

Today, Katana Cloud Inventory, a fast-growth inventory software solutions for small and medium-sized businesses (SMBs), unveiled its 2024 Ecommerce Performance Report on Shopify merchants. The survey of more than 100 SMB ecommerce leaders in the U.S. and Canada revealed that a staggering 98% of respondents have difficulty aligning inventory and production with changing consumer demand and of those, 60% reported significant difficulty.

The challenging SMB ecommerce landscape

According to the U.S. Small Business Administration, small businesses account for 99.9% of US businesses as of 2023. Yet, in today’s difficult economic climate, SMBs have a slim margin of error, and those that aren’t well-managed may not survive. This changing landscape includes many challenges, including supply chain disruptions, shifting consumer habits, and a significant rise in materials cost. To offset these costs, 80% of SMBs have had to increase prices and 53% have looked for lower cost materials. In fact, the report revealed that 26% of Shopify merchants were forced to reduce their staff in a last-ditch effort to counteract inflation.

But this could be bad news for customers and brand perception. Both strategies could lead to lower quality end products at a higher price point, just as McKinsey & Company reports that nearly half of consumers still cite inflation as a major concern in 2024. Yet, to overcome current challenges, 73% of SMBs are leveraging technology to mitigate cost pressures and increase efficiency – a strategy that can have significant impact on operations.

Scaling growth in 2024

The good news for SMBs is that 77% expect their ecommerce sales to increase this year and of those, 14% expect growth to be significant. However, respondents are struggling to understand how much product to make and where to store it. The report confirms that 66% of SMBs stated that producing and storing inventory is their largest expense. Additionally, 83% of merchants reported significant operational challenges and difficulties keeping inventory, manufacturing, and accounting data synchronized. Managing outdated business systems (64%) and aligning inventory with demand (60%) were also stated as major challenges.

Kristjan Vilosius, CEO and founder of Katana Cloud Inventory, explains: “Scaling an SMB is extremely challenging, especially in today’s rocky economic climate. Our survey found that companies are up against significant challenges in balancing their inventory with their demand and managing it with outdated systems – but there are solutions available to fill these gaps, and companies should look to technology to help them along their growth path.”

Connecting the dots with technology

When asked about focus areas for 2024, the most common responses were ecommerce transformation (32%) and inventory management (32%), followed closely by technology adoption (30%). A staggering 94% of SMBs intend to increase their spend on SaaS technology and 97% plan to incorporate artificial intelligence (AI) into their business operations this year. SMBs view technology as crucial to enhancing their business and are ready to make the necessary investment.

Shopify merchants can integrate Katana's cloud inventory software to gain full insight into demand, sales, products, production and purchasing for total visibility into the order fulfillment process. For more information about Katana Cloud Inventory and insights, visit www.katanamrp.com.

Methodology

The research team surveyed 100 ecommerce leaders from SMB companies that use Shopify across the U.S. and Canada. All the respondents are Shopify sellers and manage their inventory— none engage in drop shipping. Respondents' titles range from director to C-suite, and they represent a wide range of business sectors. To find out what challenges SMBs are grappling with and how technology is addressing them, read the full report.

About Katana Cloud Inventory

Katana’s cloud inventory platform gives businesses the visibility they need to make the right decisions. With Katana as the central source of truth, businesses can build their own tech stack of best-in-breed solutions that make it easy to order, store, and sell physical goods. Founded in 2017, Katana’s portfolio of more than 1,500 companies ranges from multi-million-dollar businesses to hobby makers, supporting over $2 billion in combined sales revenue in 2022. To date, Katana’s founding team has raised more than $51 million in funding from VC firms and angel investors and scaled its team of six to 150 employees across North America, Europe, Asia, and Oceania.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240409071690/en/