Black Friday is just around the corner — although it may be more accurate to say it’s already here. Retailers had already begun advertising their discounts as early as the first week of November, while a National Retail Federation survey showed that 38% of consumers plan to start their holiday shopping earlier than ever this year, with 45% saying that they intend to shop in stores this Friday.
With all that activity from shoppers paired with the supply chain challenges and product shortages that plagued retailers for much of the year, one would think that shelves may be looking a little barren this weekend. But this year, it’s actually quite the opposite.
Planning for the season began early, many retailers sought out alternate ports, used air freight, or brought in new suppliers in order to get shelves stocked and ready early and beat inflation. According to a recent industry survey, 66% of retailers have over-ordered products, 55% have placed rush orders, and 33% have or plan to invest in additional inventory management tools. And the strategy worked well — but maybe too well.
In all the panic to get products in stores, many are now stuck with too much of what consumers don’t want and not enough of what they do. In fact, that same survey shows that 90% of retailers are experiencing excess inventory, and 88% are already experiencing out-of-stocks on key holiday items.
The overstocked issue stems from retailers ordering too much inventory following the empty shelves that plagued profits last year, which in turn has made it a challenge to find space for new inventory on shelves. And with inflation hitting shoppers hard in their wallets, consumer demand dropped rapidly. So despite having inventory in the country and ready for distribution, some products are still sitting in shipping containers. Not because of transportation problems or port congestion, but for the simple reason that all of that excess inventory is taking up all the available space in distribution centers and warehouses.
While many of these retailers are looking to reduce the burden of that excess inventory by providing customers with deep discounts over Black Friday and Cyber Monday, it’s not necessarily smooth sailing from there. The looming recession paired with tight timelines and high volumes present a challenge to any business looking to get in front of the issue, but that’s not all retailers have to contend with.
Amazon workers in Illinois recently staged a walkout during the second Amazon Prime sale of the year. More than 20,000 union workers who build and maintain railroad tracks have rejected a labor agreement, once again triggering fears of a rail strike. Pilots for FedEx are seeking a federal mediation process involving pension benefits. Weather delays brought on by hurricane and winter weather seasons are predicted to be more extreme than ever. All of these issues compound the existing challenge and highlight just how vulnerable the supply chain still is.
The truth remains that every supply chain comes with risks, and being prepared is the key to keeping them running. From predictive capabilities to identify and resolve potential issues before they happen, to an integrated carrier network to uncover the best options when capacity gets tight, to real-time visibility and communication so you can keep everything on track — no matter what tomorrow brings, Shipwell can help.
For more information on how our technology can keep your shipments moving, talk to an expert today.