As the holiday season gains momentum, retailers may want to stock up to prepare for potential product shortages and to help maintain shopper activity.
According to a recent survey from Elementum, a real-time supply chain platform, consumers are highly concerned about holiday product shortages. Sixty-three percent of the 2,001 Americans surveyed indicated they would abandon their favorite retailer if they were not able to buy items in-store or online.
Unlike last year’s excessive inventory dilemma, retailers are experiencing the contrary. Well before the holiday season hits, retailers spend all year preparing for the biggest annual shopping days, Black Friday and Cyber Monday. Although Black Friday achieved $3.34 billion in sales and Cyber Monday reached $3.39 billion in sales this year, retailers are still struggling to combat stockouts until January.
The public is also highly stressed about missing out on their favorite products. Forty percent of respondents say they worry when they hear about shortages in the news, especially regarding a product they would like to purchase. Millennial consumers also experience major “fear of missing out” when it comes to product shortages. More than half (56 percent) of those surveyed become anxious when desired products are low in stock.
Consumer brand loyalty is also at stake with product shortages. Only 14 percent of shoppers said they would still shop with their favorite retailer if a stockout occurred during the holiday season. Furthermore, if a retailer’s product were recalled, consumer trust would also decline greatly. If a product was recalled, 74 percent of consumers in the survey would lose trust in their preferred retailer, meanwhile 38 percent of consumers said it would take more than a month to gain their loyalty back.
As consumers become more demanding and frugal with their holiday budgets, retailers may want to plan accordingly for potential inventory shortages. Should retailers be prepared from late November to early January, they won’t lose consumer loyalty during the most important shopping time of the year.