How Inflation, Supply Chain/Logistics problems, War, and the pandemic are shifting consumer demand, and what organizations should do about it!
June 2022 – Target recently announced that its current inventory position had missed a major shift in consumer purchases and left it with too much inventory. Large screen format TVs, home furnishings, and kitchen appliances were identified by the CEO as the product categories most affected.
This overstock situation includes both on-hand and incoming merchandise working its way through the supply chain and logistics. Consumer spending for food and energy is reducing demand for durable goods and specific categories (where Target sells only 20% of revenue compared to 50% at Costco or Walmart in the USA). Government and commercial economists are predicting that consumer disposable spending will be reduced by inflationary rises in energy and food.
The retailer indicated that consumers are shifting buying patterns in food and goods as well. Accordingly, the retailer has announced it will be taking a more aggressive position at discounting and stocking. The inventory already on hand will be heavily discounted. The inventory on order will see cancellations and shifts based on forecast demands. It’s interesting to note that Target identified changes in buying behavior in March but is acting only two months later.
In the next post in our series, EkaLore will use a fictionalized example of how Alien Invasion, enterprise agility, and global economics interact to likely change the winners and losers in marketspaces and surprise economics.
Read this and other posts in the series at www.ekalore.com/ripple-effect
Supply Chain vs. Logistics
The popular media and politicians have adopted the terminology “supply chain crisis” actually referring to combined elements in supplies and logistics. EkaLore uses the term ‘supply chain’ to talk about materials, components, production, and products. The term ‘logistics’ is applied to the packaging, handling, and movement of goods, data, and value chains.
Comments