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Supply Chain Challenges Still Loom Large

Logistical snarls could put a big damper on holiday sales, study finds.

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Supply Chain Challenges Still Loom Large
PHOTOGRAPHY: Thitivong/iStock.com

Eighty-three percent of supply chain professionals at retailers in the U.S. and U.K. anticipate supply chain disruptions will negatively impact revenue this holiday season – up from 70% in 2022. That’s the conclusion of a new study from Coupa Software, which specializes in business spend management. As a result, retailers anticipate an average revenue loss of about 10 percent, which during this lucrative selling period could translated into billions of dollars lost.

“While I’ve been seeing Christmas decorations cropping up in stores for the last few months, we aren’t even close to the height of the holiday shopping season. Yet our research shows over half of retailers (53 percent) are already experiencing out-of-stocks on key holiday items,” said Nari Viswanathan, Coupa’s Senior Director, Supply Chain Strategy. “If retailers want to avoid empty stockings this year, they must act quickly to capitalize on recent supply chain learnings, what-if scenarios, and rapid response processes to minimize potential disruptions during these critical last months of the year.”

Retailers predict when it comes to product shortages the most impacted goods will be household goods and decor (45 percent), apparel and electronics (41 percent for both).

Half of businesses are experiencing excess inventory and 54 percent are concerned about one or more of their company’s suppliers shutting down. With labor shortages looming this holiday season, 61 percent of retailers expect to experience increased wait times and 54 percent expect increased shipping times due to staffing shortages.

“The last few years have been without question hard for supply chain professionals, and we get it, but our data shows a majority of retailers are still challenged by supply chain disruptions, product shortages and excess inventory. Meaning they aren’t applying the right fixes to their design and planning,” said Viswanathan. “If businesses want to protect their bottom line they must move from one-off episodic designs of their supply chain networks to a state of continuous design. When supply chains are designed to adapt and evolve, organizations can make tradeoffs, optimize policies, simulate situations and accelerate the time between making and executing decisions. This builds resilience and enables businesses to close their books at the end of the year with confidence.”

The survey drew responses from 300 retail supply chain leaders and more than 2000 consumers in the U.S. and the U.K.

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Click here for more from the survey, including its findings on shopper’s spending plans for the upcoming holiday season.

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