Shoppers should take a special strategic approach in 2021, says College of Business logistics guru Craig Austin.
A supply chain expert has a warning for those putting off their Christmas shopping.
“It used to be you could order around December 18 and still get your gifts,” says Craig Austin MBA ’98, an assistant teaching professor at FIU Business. “Now, all bets are off.”
The COVID-19 pandemic has shaken up the global movement of goods. People have changed jobs, factories have closed down and demand has skyrocketed for certain products. The result is that some retailers can’t guarantee the on-time delivery of items due to shortages.
But don’t fret yet that your Christmas, Hannukah and other holidays will be ruined. The supply chains are actually performing well under these conditions, Austin says. The shakeup just means that shoppers should take a special strategic approach this year.
“I would first look online,” Austin says. “If you are having difficulty and seeing that there are waits, then leaving your browser up and walking into the stores is a good idea. These are huge retailers and they have muscle in terms of acquiring products for you.”
If shopping online, Austin recommends hitting the order button early.
“Monday of Thanksgiving week or as soon as possible,” he says.
For those who feel comfortable venturing out, shopping in-person could be an intriguing option. Many retailers have increased the size of their inventories in response to uneven freight imports.
“Traditionally, the whole idea for retailers was to have products ‘just in time.’ They carried as little inventory as possible because there is a carrying cost to it,” Austin says.
“But we’re not in that environment anymore. We’re in a ‘just in case’ environment. Just in case they don’t get their imports, they can make money by selling what’s on their shelves.”
The additional cost of acquiring more products will be passed on to consumers this holiday season through higher prices, says Austin. In fact, he claims that inflation as a whole is being driven higher by supply chain costs. Consumer prices soared in October and are now up 6.2% from a year earlier.
“The last time I checked, there were 81 ships waiting off of the port of Los Angeles,” Austin says. “What some of these retailers have done is they have leased their own ships. Or in the case of Beanie Babies, they are air-freighting them into the U.S. Air freighting is not cheap.”
Despite the supply chain woes of 2021, Austin is hopeful that most people will be able to buy what they want for Christmas, although at a slightly higher price.
“I prefer to be an optimist, even though I’m a realist as well,” Austin says. “My sense is that most people will be able to find their products if they order soon enough, especially if you go into the retail stores.”