Back in stock: Supply chain management expert weighs in on holiday outlook

HAMPTON ROADS, Va. (WAVY) — Many holidays, people rush to get the most popular presents for under the tree. Sometimes shoppers are greeted with empty store shelves, a backup in products, or they’re competing for the last toy on the shelf.

This year, it’s quite the opposite. Many stores are seeing an abundance in stock.

Our supply chain is all inter-connected, and even the weather and the environment can impact the timeliness of your online orders this holiday season. While certain electronics and hot toys, and things like olive oil, are still difficult to find in some cases, other industries, such as the home goods sector, are seeing more stock than they were hoping for this holiday season.

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Each year, more than 11 million maritime containers arrive at our nation’s seaports, according to U.S. Customs and Border Protection, many of those coming through Hampton Roads to the Port of Virginia.

Last year, a backup at one of our nation’s ports caused some major issues when it came to getting gifts to your door and under your tree on time.

“It was sort of like rush hour traffic at the HRBT,” said ODU Professor of Supply Chain Management Erika Marsillac. “It sort of began to build, build, build, build, and then all of a sudden, you’ve got this wave of stuff coming.”

Marsillac said a lot of our products are manufactured in Asia, so that’s usually where shipping containers start. They get filled with products — anything from car parts, to couches, to the hottest new toys on the market — then they head to the U.S.

“They’re taken off of the ship and then literally, you’re perhaps behind them in traffic on Hampton Boulevard,” Marsillac said.

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Marsillac said the pandemic changed the way we buy stuff, and retailers are seeing that too. Haynes Furniture CEO EJ Strelitz said they’ve seen some big ups and downs in the furniture industry over the past few years.

“Housing market, interest rates — that combination, it’s a one-two punch,” Strelitz said.

He said there was a huge bulge in demand during the pandemic. Many people wanted to upgrade their furniture and redecorate because they were stuck at home. but with factories closed overseas, it caused some consumers to wait weeks or even months for products.

And Strelitz said another punch to retailers was an increase in shipping container rates, even with the lack of supply.

“Not only was it difficult to get a booking, you were having to pay insane amounts, and in many cases, the cost of shipping exceeded the cost of the product on the container,” Strelitz said.

Now, they’re on the back end of that post-COVID boom.

“We try to anticipate demand, which is an imperfect science at best,” Strelitz said.

And with the acquisition of luxury home brand, Mitchell Gold + Bob Williams, Haynes is seeing an abundance in stock on their floor, which isn’t a bad thing for customers.

“It’s an amazing time for the consumer in furniture, not for grapefruits, but furniture prices are way below what they were in ’19,” Strelitz said.

But even though prices are down, economic uncertainty is causing the consumer to think twice.

“Part of it is because people have less money because interest rates have gone up,” Marsillac said, “so they have to spend more money on housing or other things and we’ve also gotten a little over that, hey, I need to buy stuff. We’ve gotten past our pent-up demand.”

According to NerdWallet, about a quarter of holiday shoppers plan to reduce their holiday spending this year. Marsillac said consumers plan to be much more deliberate in what that what they’re looking for.

“They are much more price sensitive,” Marsillac said. “So they’re saying, ‘well, I want a sweater, but let me wait and see if it goes on sale,’ so the consumer demand from our region, from the United States, has been going down.”

And because people were limited in what they could do during the pandemic, a lot more people are spending money on things that may not come in a shipping container.

“We couldn’t go out to have a restaurant meal, we couldn’t go on vacation, we couldn’t do those things, so, all right, fine, I’ll buy a TV, I’ll buy a peloton, I’ll buy a whatever,” Marsillac said. “So now we’re spending on experiences — let me go to Vegas to see something, let me try to visit my friends, my family, those sorts of things.”

Meaning locally-sourced products, or products that could already be sitting in your local stores, may be the way to go this holiday season.

“I like looking for locally-sourced stuff, I like looking for things that are close by,” Marsillac said. “Again, with the experiences, you don’t have to worry about whether or not a nice holiday meal is going to be on a container ship, or a trip to the botanical garden.”

As for the future?

“I think demand is going to probably be a little depressed for a little while,” Marsillac said. “That doesn’t mean you can’t have fun, that doesn’t mean you can’t focus on stuff, but again, consumers are more price sensitive this season.

“They’re looking for the sales, they’re more deliberate in their choices, so if you want something, you’ll keep an eye out instead of snapping it up right away.”

The Panama Canal Authority reduced maximum ship weights and daily ship crossings in an effort to conserve water, so some shipping companies are still experiencing delays there, and while this could delay some of your holiday purchases, if you order with time to spare, your package should make it in time to put under the tree this year.

Marsillac said expected transit time, usually from the Pacific or from Asia to the Pacific coast, is about two-to-four weeks, and then from Asia to the east coast, it’s about three-to-five weeks.

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