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Will Inventory Challenges be the ‘Grinch’ That Steals This Holiday?

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Since the early days of the COVID-19 crisis, consumers have experienced product shortages at their local retailers. Panic buying of household items like toilet paper, hand sanitizer, sanitizing wipes and thermometers led to the initial shortages. Right behind that initial wave were all the accoutrements of a well-ordered home office — webcams, monitors, mouses (mice?), printers, speakerphones and pretty much everything in the computer department of your local Best Buy.

Then as things achieved a level of stability, other items joined the list, including bicycles, hair color, flour, home fitness equipment and dogs (and all the supplies needed to maintain them!). This list goes on and everyone reading this has personal experience with something we took for granted as being readily available. This author went to six stores to find a single metal rake in the fall of 2020! 

Most of the early shortages were driven by changes in demand. Suddenly, people who formerly got their hair colored in a professional salon were doing their own touch-ups at home. Health clubs were closed or deemed dangerous, and people began working out at home. And so on.

Now in 2021, the impacts of a highly efficient but slightly disrupted global Just in Time (JIT) inventory system are being felt in industries like apparel, automobiles and construction supplies. Small interruptions at one link in the supply chain are magnified downstream. The causes are far and wide and have created a cascading affect across many industries. Changes in demand are still in play, as are COVID-driven manufacturing disruptions, shipping delays and misguided efforts to reduce inventory (mostly through discounting). These and many other factors have created shortages across a wide range of consumer products.

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With a robust holiday season predicted, retailers (and the shopping centers they inhabit) are facing the possibility of consumers with cash to spend, unable to find the gifts they want to buy. Not exactly the best situation for a retailer trying to recover from a year and a half of global pandemic restrictions. 

So what can retailers and landlords do to each get their fair share of the coming record sales, and minimize as much as possible the inevitable shopper disappointment caused by supply chain challenges? Here are a few tips for the immediate opportunities to make the most out of 2021 and a look ahead.

  • Start the Message Early — as in NOW. Understanding where your inventory is, and telling your shoppers to come get it while it’s hot (and here!) is important. The holiday shopping season has been elongating for several years and last year was longer than ever. We saw holiday messaging before Halloween in 2020 and expect to see it again this year. If you’re a retailer, message your shoppers via email and let them know they shouldn’t wait. Send direct mail saying the same thing. Ask your landlord to send to their email list and make sure they promote you across all their media — digital, on-premises and even out of home.
  • Digital Gift Guides. Help your shoppers find that perfect alternative gift by promoting and packaging products and services that are more abundant in your inventory. Give them options and alternatives.
  • Gift Cards. For items that might be out of stock, encourage gift card purchases for the exact price and give your shopper a way to customize and “visualize” the gift that can be purchased with the card when it’s back in stock.

The notion of “out of stock” is not new to brick-and-mortar retailers, nor is it to consumers. This year, however, is different and potentially more widespread than ever. These shortages will likely have a measurable impact on the bottom line. After all, it’s not just a single high demand product that may be out of stock.

In time, supply chain issues will resolve themselves, manufacturing will move closer to demand and retailers and landlords will continue to find greater efficiency in their operations. While consumers may not think in terms of omnichannel (to them it’s just shopping), smart retailers and landlords will continue to expand into more available and more efficient sales channels.

The digital evolution of the modern shopping experience is happening quickly. This is presenting more channels, more cost-effective acquisition and new partners to deliver on those — in-store and online. 

And it’s not just retailers that are building the new retail experience. Savvy shopping center operators are exploring the creation of digital marketplaces that mirror the physical shopping center in the digital world, so that everything available in-store at your local shopping center may also be ordered online for pickup or delivery.

This holiday, innovators with localized inventory visibility will be at a distinct advantage, offering shoppers enhanced customer experiences like buy online, pick up in-store (BOPIS) and targeted location-specific promotions and gift guides based on real-time local store inventory. Beyond the holidays, local inventory accuracy will be key to retailers lowering the costs of returns through improved reverse logistics and a path to marketplace participation.

So as consumers come to the mall this holiday season ready to buy, they’ll be looking not only for deals but in-stock inventory as well. Get them there earlier, get them to order online and pick up in-store, and most of all, let them know how they can find that perfect gift even if it wasn’t the one they were originally looking for.


John Dee is President, Placewise Americas. He has led the company to become the leading provider of digital and interactive services to the shopping center industry in the U.S. and Canada, where he drove growth to over 800 shopping centers served. Dee was instrumental in the creation of the company’s products and services that drove growth across North America, expanding market opportunity for the company in North America, Europe and Asia.

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