Business Insider: Retailers are over-ordering products to keep shelves stocked for the holidays, and it’s making the supply-chain crisis even worse, an expert says
- Retailers are over-ordering key items for the holiday season to keep shelves stocked.
- A supply chain tech CEO said that this risks making the supply chain crisis even worse.
- It puts extra strain on logistics providers and leads to further delays.
Fears of holiday-season stock shortages have prompted some retailers to begin over-ordering key items, a supply chain expert says – a development that risks piling further pressure on already stressed supply chains.
Jonathan Savoir, CEO of supply chain technology company Quincus, told Insider that retailers are ordering products from multiple manufacturers, rather than a single supplier, as they seek to minimize the risk of shortages this holiday season.
Savoir would not name retailers employing these tactics but said it was a pattern that he is seeing across the industry. The data he tracks shows that electronics and household items are the products being over-ordered the most.
Retailers are currently battling a crisis in the global supply chain network, brought about by a surge in demand for goods amid a labor shortage. Retailers and manufacturers are struggling to shift products from factories or containers on ships and in ports in time for the holiday shopping season.
Savoir is not confident that over-ordering is the best way to navigate the supply chain crisis. Not only does it put extra strain on logistics providers, but these retailers also risk ending up with leftover stock after the holidays.
“There’s no reason to panic buy, it just leads to a worse effect,” he said in a recent conversation with Insider.
“People don’t look at in aggregate,” he said, “they look at it from their point of view: ‘I want to have my store filled, I don’t want to have it empty when Black Friday comes around and there are people storming into my stores.'”
Despite efforts by retailers to keep shelves stocked, supply chain woes have experts warning shoppers to prepare for the worst. Consumers should shop early to avoid disappointment rather than waiting for the deals and discounts that usually come in around Black Friday week, they say.
Joel Bines, managing director of retail consulting firm AlixPartners, recently told the Financial Times that retailers will struggle to stock the hottest items, such as toys.
“There will definitely be weeping children this holiday season,” he told the FT.
At this point, there’s no indication that things will get any better by 2022.