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BizReport : Ecommerce : October 20, 2021

Expert: Why the supply chain has disrupted

Consumers the world over are quickly learning just how fragile the supply chain is. Ports in the US and on a global scale are backed up, there is a shortage of workers and equipment to offload and then transport goods, which means fewer things on store shelves. We asked an expert what is causing the disruption.

by Kristina Knight

"We're in a really unusual situation right now with a lot of pent up demand from consumers, as well as a domino effect of supply-side shocks that are causing ripple effects around the globe from shipping container shortages, increased shipping costs, and port congestion," said Madhav Durbha, VP of Supply Chain Strategy, Coupa. "Demand for luxury goods and apparel is skyrocketing because people are leaving the house more often and quite literally want to put their best foot forward when reconnecting with family, friends and colleagues. These items are significantly impacted by the global supply chain issues in China and Vietnam due to the spike of Delta variant cases and labor shortages. As a result, prices are expected to increase, discounts will be less common and low inventory levels are expected."

Also a factor: a semiconductor shortage effecting electronics and gaming consoles. These shortages, as well as port slow-downs, are pushing the resale market higher than ever as shoppers look to existing products to fill the gaps of their own needs. That, Durbha says, is why the holiday season is going to be tough not only on harried workers but on shoppers who can't find the products they want in a timely manner.

However, the supply chain disruption could have another impact on the ecommerce marketplace - that of making the reseller market more competitive and lucrative.

"The ongoing supply chain disruptions might actually be a good thing to reinforce sustainable shopping habits, especially for the already booming retail resale market, which is projected to eclipse fast fashion by 2030. Shoppers might be left with no other option but to turn to local, refurbished or second hand resellers for their gifts," said Durbha. "After a tough few years for many businesses, consumers have an opportunity to shop local this holiday shopping. SMBs provide unique gifts and spending with them shows support for your community and benefits your local economy. Consumers have been spending more conscientiously in recent years and, as a result, retailers are prioritizing circular supply chains. I'm hopeful these disruptions serve to fast track a greater emphasis on sustainability - from both retailers and consumers alike."

Tags: Coupa, ecommerce, ecommerce trends, m:commerce trends, retail trends, supply chain, supply chain disruption

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