Tuesday, October 26, 2021 by Matthew Davis
The slowdowns caused by the ongoing global supply chain crisis are putting retailers in a crunch to keep their shelves fully stocked as shoppers rush into the stores and onto websites to secure presents for loved ones. However, shoppers are finding a record number of out-of-stock messages as they scan retail websites.
Out-of-stock messages on the internet are expected to be up 172 percent this holiday season compared with 2020 levels, and up 360 percent on a two-year basis, according to new data from Adobe Analytics. The apparel category is forecast to have the highest out-of-stock levels, followed by sporting goods, baby products and electronics.
To compile its holiday expectations, Adobe tracked more than 1 trillion visits to retailers’ websites in the United States and monitored over 100 million items sold online. “We’ve never seen levels like this before,” said Vivek Pandya, lead analyst at Adobe Digital Insights. “This is very much not the norm.”
Consulting firm Deloitte noted that people are shopping early to have enough lead time for orders and avoid finding items unavailable. They are fearful about not being able to buy electronics, toys and home items on their holiday wish lists.
A poll conducted by Deloitte found that about a third of consumers blamed couriers and delivery companies for shipping delays and other supply chain issues, 27 percent blamed external factors like the weather and 21 percent blamed the retailers.
“The problem goes beyond just the couriers,” said Rod Sides, vice chair of Deloitte’s U.S. retail and distribution practice. “There’s a ripple effect back into the country of origin.”
Deloitte polled 4,315 consumers from Sept. 7 to Sept. 14 about their shopping plans and expectations for the season. Despite the supply struggles, consumer demand is expected to be strong into the new year. Online sales are still surging, even as more people return to malls to shop.
Transportation Secretary Pete Buttigieg admitted that the supply chain problems will persist for months. He acknowledged that the administration is limited in some aspects in how it can intervene given the multifaceted nature of the global supply chain “that is mostly in private hands, and rightly so.”
“Our role is to be an honest broker, bring together all of the different players there, secure commitments, and get solutions that are going to make it easier,” Buttigieg said.
To ease the supply chain blockages and avoid stock-outs, President Joe Biden wanted major delivery providers and retailers including FedEx, UPS, Walmart and Home Depot to work nonpeak hours at West Coast ports.
Biden announced that the Port of Los Angeles would operate on a 24/7 basis to address a glaring bottleneck that has caused reverberations throughout the supply chain.
The administration is racing to lessen strain on the system as the holiday season approaches – a period with the potential to loom large in voters’ psyche if problems endure and could hamper many businesses that rely on the increased economic activity at the end of the calendar year.
“There are a bunch of different players who have to have seats at the table to be able to make that happen,” Sides said about Biden’s efforts. “Working around the clock is perfectly fine. The challenge is going to be that [labor] costs are going to continue to go up.”
Moody Analytics said the disruptions and product shortages will get worse before they get better, citing delays at key U.S. ports and the nationwide labor shortage. The credit rating agency said there are dark clouds ahead for the global supply chain as there is no clear solution to work out kinks between subsections of the supply chain around the world.
It has identified the alarming shortage of truck drivers as the “weakest link” in the supply chain. This problem has left shipping yards swamped with shipping containers.
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