Meredith Stafford, staff writer
This holiday season, digital sales are expected to rise and the number of delays customers will experience is set to increase due to supply chain issues. Shoppers are encouraged to begin purchasing items for the holidays now to avoid shortages and delays.
The COVID-19 pandemic has been the main impactor of the supply chain delays. The Washington Post says that raw material prices and shipping costs are rising along with worker shortages among truck drivers and warehouses. In addition to this, there are record backups at U.S. ports such as the Port of Los Angeles because of pandemic protocols and worker shortages. President Biden recently said that the Port of Los Angeles would be open 24/7 in order to help fix the bottlenecks. Corporations such as Walmart, UPS and FedEx are included in this increase of operations.
John Grout, professor of business administration and department chair for technology, entrepreneurship and data analytics, described the supply chain issues through an activity he does with his class. In this “paper chase,” students use a small-scale supply chain that moves pennies through cups and their job is to buy products from suppliers and deliver them to customers.
“I provide all of the final market demand and unbeknownst to the students, the pattern is very stable and it starts at one level and they make one change that’s a relatively modest-sized change and that one little change will create all kinds of havoc and chaos,” Grout said. “What happens is once you get a little disruption in the supply chain, it will ripple up and down the supply chain and cause all kinds of problems.”
Grout related this ripple to the early lockdowns in 2020 and shortages that occurred with toilet paper and the delays with the new demand for masks. He believes that overreacting to the supply chain and shipping issues will only exacerbate the problem.
Grout also expects scarcity in products to drive up prices during the holiday season and reduce the number of sales that will be offered as companies look to maximize their revenues.
Inflation is currently at a high of 5.4% and retail sales have risen in the past two months. The rising prices for raw materials and transportation has especially affected smaller-sized companies. According to the Washington Post, shoppers are encouraged to budget to avoid higher holiday prices due to lack of inventory and shop early from reputable sources online.
Business Insider suggests that individual consumers plan ahead to avoid the inevitable delays, but recommends that shoppers avoid buying large quantities of products in a short amount of time, which could create its own problems in the supply chain delays. Instead, shoppers should opt for purchasing locally or ordering online and picking up in store. Inside also recommends online shoppers purchase multiple items in one online order.
Adobe expects U.S. online sales to reach $207 billion between Nov. 1 and Dec. 31, meaning a large increase in digital shopping during the holiday season.
The New York Times says that many companies ordered their products earlier this year, which exacerbated the issue and caused more goods to be sent to the ports. It estimates that the shortages will continue well into 2022 and possibly beyond.
According to Grout, he is surprised that prices have not risen more than they already have and is anxious to not see large continuous inflation, which is still an ongoing problem.
“I think that people kind of tend to adapt,” Grout said. “Society itself is adaptive and if you can’t get something, you use a substitute good or something like that and so there is some adaptation going on. We’ve weathered it reasonably well so far, but there are some issues out there.”