Worst Shoe Shortage is Yet To Come

Experts Say the Worst Shoe Shortage is Yet To Come – Yahoo Lifestyle

Source yahoo.com

Global supply chain slowdowns are set to impact everyone this holiday season, from retailers to consumers.
The issues are particularly plaguing the footwear industry. For example, a global shortage of rubber and plastic, which are essential in the production of sneakers, has made it difficult for factories to produce enough products to meet demand, a phenomenon exacerbated by labor shortages and factory shutdowns abroad in China, Malaysia, and Vietnam. On top of material shortages, factory shutdowns, high freight costs, and port congestion are making it tough for retailers to secure enough inventory.

Consumers are aware of these issues. According to KPMG’s consumer pulse survey for the holiday season of 2021, more than 50% of 1,000 respondents expressed concern about shortages in stores and shipping delays. 61% said they planned to start shopping for the holidays in October to prepare for out-of-stocks.
Ahead of the holiday shopping season, I embarked on a footwear shopping spree across seven stores in New York City. On the wholesale and off-price side, I stopped by Foot Locker, DSW, and Famous Footwear. On the brand-owned DTC side, I stopped by Nike, Ugg, Skechers, and Vans.
Overall, I did not observe any notable inventory shortages in any store. According to analysts and experts, there are multiple reasons why this was my experience.
Since most inventory in the brand-owned stores is kept in store rooms out of customers’ view, it was difficult to tell if there were any inventory shortages with a quick glance. However, at the Vans store, I inquired about a few top-selling shoes, such as the white slip-ones that are reportedly flying off shelves in the wake of Netflix’s Squid Game. They were still in stock.
Shoshy Ciment/Footwear News
According to BMO Capital Markets Analyst Simeon Siegel, if a company has limited inventory, it will likely allocate products to its most important channels and markets first. New York is home to many flagship stores and a thriving shopping environment, which could account for my rather pleasant shopping experience. Shoppers in other less crucial geographies or stores might have a different experience.
Siegel also said that while stores may have a physical product, scarcity might be present in the lack of compelling products available.
“Newness sells out fast and it sells out at full price (or higher),” he said. “Excess can sit around. Just seeing boxes doesn’t guarantee you are seeing the boxes that will sell.”
Shoshy Ciment/Footwear News
This type of scarcity will likely be most present in a chain like DSW or Famous Footwear explained Liza Amlani, principal and founder of consulting company Retail Strategy Group.
Still, when I visited DSW and Famous Footwear, the shelves were overflowing with boxes of inventory. According to Amlani, while some stores might appear to be fully stocked, much of this inventory could be excess or older. At the same time, some stores such as DSW have been proactively working to diversify sourcing to maintain products in stores, which could also account for my experience.
Moving forward, Amlani anticipates that the truck driver and labor shortage will further delay products and create more of a visible shortage in stores.
“Shelves will be empty,” she said. “I assure you.”
Shoshy Ciment/Footwear News
Other experts also suggested that the worst of the shortages are yet to come.
“When it comes to the supply chain, we are always looking ahead,” said Bindiya Vakil, CEO of global supply chain monitoring company Resilinc. “The shortage we’re talking about is not related to the shoes that are in the store or even the ones en route; it’s the supply behind this layer.”
Given that sneakers aren’t technically essential items, these shortages won’t be as dramatic as previous shortages of toilet paper and eggs that resulted from panic-buying. But fewer shoes overall will likely lead to increased prices for high-demand pairs. Shoe prices already increased 6.5% in September, compared with the year-ago period.
“By increasing the price, you automatically have fewer people buying the shoes,” Vakil said.
Despite all the hoopla regarding the supply chain this year, shortages are not a new concept for the footwear industry.
According to Matt Powell, the senior sports industry adviser for The NPD Group Inc., port congestion has been a constant theme for the last five years. And while the impact will be more visible in the spring, these delays will not be the death knell to the industry.
“I see this as an aggravation, and will not have a material impact on the business,” Powell said.

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