Two workers load boxes into an Amazon truck
The looming holiday season will likely exacerbate a global supply chain calamity that’s already underway, as shoppers rush into stores and onto websites to secure presents for loved ones.
Experts warn shoppers can expect to find record out-of-stocks messages as they scan retail websites and may face prolonged shipping delays. Fortunately for retailers, customers are more likely to cast blame for late packages on delivery carriers, one survey found.
Out-of-stock messages on the internet are expected to be up 172% this holiday season compared with 2020 levels, and up 360% 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, Adobe said, followed by sporting goods, baby products and electronics.
“We’ve never seen levels like this before,” said Vivek Pandya, lead analyst at Adobe Digital Insights. “This is very much not the norm.”
To compile its holiday expectations, Adobe tracks more than 1 trillion visits to retailers’ websites in the United States and monitors over 100 million items sold online.
A separate survey by consulting firm Deloitte found about a third of consumers would point the finger at couriers and delivery companies, such as UPS or FedEx, for shipping delays and other supply chain issues. Twenty-seven percent of people told Deloitte they would fault external factors, such as weather. Only 21% say they blame retailers.
Deloitte polled 4,315 consumers from Sept. 7 to Sept. 14 about their shopping plans and expectations for the season.
In reality, the slowdowns stem from a number of factors. There are container shortages, floods, Covid-19 outbreaks that backlogged ports, and a dearth of truck drivers and warehouse workers, to name a few. It’s all putting retailers in a crunch to get enough goods to keep shelves fully stocked.
“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.”
“There have been a number of countries that have shut down manufacturing capabilities,” Sides said. “We’re just finding some of that manufacturing capacity coming back online. And it takes time to work its way out.”
Still, delivery providers’ service levels have been taking a hit. On-time performance was 85.1% for FedEx in September, according to ShipMatrix, a software provider that analyzes shipping data, compared with 95.2% at UPS, and 95.5% at the U.S. Postal Service. Those levels were all down from August, ShipMatrix said.
Representatives from the Postal Service, UPS and FedEx weren’t immediately available to comment.
Last Wednesday, President Joe Biden launched an effort to ease supply chain blockages and avoid stock-outs ahead of the holiday season. As part of that plan, major delivery providers and retailers including FedEx, UPS, Walmart and Home Depot are going to be working nonpeak hours at West Coast ports.
“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.”
Shoppers are getting the messaging to plan ahead. Thirty-nine percent of people polled by Deloitte said they intend to start shopping early to give enough lead time for orders and to avoid finding items are unavailable. Consumers are most concerned about not being able to purchase electronics, toys and home items on their holiday wish lists, Deloitte found.
And 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.
Adobe expects U.S. digital sales from Nov. 1 to Dec. 31 to hit at least $207 billion, which would represent a 10% increase from 2020. Digital sales could climb as much as 15% year over year, according to Adobe, in certain scenarios and dependent on how things progress with the Covid-19 pandemic.