In 2021, retailers are facing a number of challenges as the impacts of Covid-19 continue to ripple throughout the global economy.
Changes in consumer behaviour and workforce disruptions have resulted in a global supply chain squeeze.
Here are the top 5 challenges that toy retailers are facing as a result, and what Keycraft is doing help.
The number one headache for retailers in 2021 is getting hold of stock.
Despite an initial drop in consumer demand when Covid-19 first hit, retail demand for certain products is booming again. People are spending more time at home with more disposable income thanks to savings on holidays and socialising. They’re compensating by spending more time and money shopping, particularly online.
Combine that with a shortage of shipping containers available in the right place, Covid outbreaks hampering manufacturing production or temporarily shutting down ports in China, plus knock-on delays due to the blockage in the Suez Canal, and you have the perfect storm.
A continued slowdown of supply, particularly from China, is why retailers have been finding it increasingly challenging to secure stock.
Keycraft has maintained our stock levels on target and we have plenty of available stock. As mentioned in our last article about the stock crunch, around 90%+ of our products are still in stock. We have a strong supply network and aim to maintain this stock level throughout these challenging times.
See the large selection of wholesale pocket money toys and gifts we have in stock.
Stock deliveries have been taking longer, and there have been challenges around securing delivery at all. When businesses book a container, there’s just no guarantee that it will arrive at the moment.
The shipping industry runs on tight profit margins, so there’s no extra capacity built-in. Vessels and containers which are not filled aren’t viable for the operators.
A high volume of imports in countries such as the US or UK isn’t matched by the lower volume of exports. This results in containers stockpiling at these locations since it’s not profitable for them to be returned empty to manufacturing countries.
On top of this, a surge in consumer demand has gone hand-in-hand with offloading docks running at reduced capacity to manage the spread of Covid. The result is a backlog of ships waiting outside ports to get in and unload. The knock-on effects for vessel scheduling take many months to get back on track given the lack of spare vessel and container capacity to pick up the slack.
Our distribution network is one of our greatest strengths. With Keycraft warehouses strategically placed in the UK, US and Australia, we can deliver stock to our customers more rapidly from these locations.
A fast delivery service with low carriage costs means that you can stock up in smaller quantities more often.
The global price increases we are witnessing are driven by the shortage of shipping containers as well price hikes in raw materials and fuel. Covid outbreaks and control measures have hit production in many industries, from oil and gas production to toy factories.
The overall result is more competition for less stock and shipping containers, which is why prices continue to rise.
Many of our top-selling items were already held in stock and have not been affected by the price increases. We have a vast catalogue of popular products to choose from at the usual price.
We’re very careful about having to pass on any price increases if avoidable.
Note: Year-over-year percentage change of OECD-Total consumer prices. Source: Organization for Economic Cooperation and Development. Graphic: Tal Yellin, CNN. Image source.
Footfall in stores hasn’t yet returned to pre-covid levels. A drop in overseas visitors and people feeling confident about shopping in retail stores is still dampening in-store sales recovery. There has been more need for retailers to focus efforts on eCommerce websites in the meantime.
You may also feel wary about stocking up due to the potential threat of more lockdowns in the future. No one seems to feel confident that we’re completely out of the woods yet. Unsold stock causes cash flow issues if sales are down and your business is trying to ride it out.
Maximizing impulse sales for your in-store visitors is more important than ever. We can help you make your store and products as attractive to shoppers as possible. Our display solutions provide more wow-factor for kids and parents alike, and our retail consultants are on hand to help you create what we call ‘retail theatre’.
To help drive both in-store and online sales, we have created a social media toolkit and an image library to help retailers promote their stock. We can also help you choose products that will sell best based on the demographics of your customers.
On top of that, if you are struggling to sell products that you have purchased from us, we will exchange them for alternatives.
A lack of communications from suppliers at a time like this is certainly not ideal. Timely communication when things are going wrong is the most important time to be communicating with customers.
If stock isn’t turning up as expected, product lines are no longer being supplied, or price increases are coming into play, you need to know so that you can make contingency plans as soon as possible.
We will continue to communicate with our customers through email and social media channels about everything going on.
We are available via landline at our head offices. For our existing clients, account managers are directly contactable via their mobile phones.
The team at Keycraft will remain hard at work making sure we stay on top of the situation. We’re doing everything we can to mitigate any product supply issues and support our clients throughout this disruptive period.
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