Disruptions in the supply chain don’t appear to be letting up anytime soon, and most retailers are now worried they will not be able to fulfill customer needs this holiday season. According to a report from software company Coupa, 7 in 10 retailers expect that issues with the supply chain will have a negative impact on their business.
The holiday shopping season is a critical revenue period for retailers, so it’s no surprise that the majority are concerned. Many are trying to find workarounds to combat the issues – 66% have or plan to over-order products, 55% have or plan to rush-order products, and 33% have or plan to invest in additional inventory management tools.
Retailers noted that the supply chain disruptions have caused numerous inventory issues due to seasonal merchandise arriving late. Because of this, 90% plan to offer fewer Black Friday or Cyber Monday deals – a 36% increase from last year. For those who are offering deals, 2 in 3 said they plan to run them earlier than in previous years.
“Seemingly overnight, relentless shortages are flipping to inventory surpluses in certain categories. This is further complicating retailer’s ability to orient their supply chains to rapidly shifting consumer behaviors and evolving regulations,” said Dr. Madhav Durbha, vice president of supply chain strategy at Coupa. “Retailers must pay close attention to consumption patterns and selectively build in optionality in their supply chain to address the changing wants and needs of consumers.”
There are a few ways that retailers can improve their inventory, according to the report. Taking advantage of demand-shaping practices, such as dynamic pricing, promotions management, and markdowns, can help retailers overcome some of the challenges they’re facing this holiday season.