Electronic retailers fulfilling demand despite global chip shortageWednesday, December 01, 2021
BY ANDREW LAIDLEY
At least three local electronic retailers are admitting that the global shortage of semiconductor microchips has affected the availability of certain electronic items this holiday shopping season.
But the retailers maintain that they have been able to supply consumers with most of the items they want so far, highlighting that preparation and direct dialogue with suppliers have been crucial in that process.
The semiconductor microchips which are primarily sourced from the US are used in various electronic gadgets like computers, smartphones, appliances, gaming hardware and medical equipment.
The chip shortage started after COVID-19 forced factories which manufactured the supplies needed for chip manufacturing to close. Simultaneously, demand for the microchips rose leading manufacturers to sell the crucial component to the highest bidder.
In the United States, online shopping for Black Friday sales dipped to US$8.9 billion a little below the US$9 billion recorded last year. Based on Adobe Analytics, a major contributing factor to the decline is the chip shortage which affected the availability of many appliances and electronics.
Here in Jamaica, marketing executive at ATL Automotive Group Talitha Morrison told the Jamaica Observer, “There have been times where we have customers interested in a number of our products that we don't have in stock because of supply issues, so I wouldn't say that we've been able to comfortably meet demand for the entire year. I think we're just now getting our groove, figuring out how we navigate through it. So, I wouldn't say that we've been able to fully give 100 per cent as we would have wanted to but I also wouldn't say that we're completely hampered by the situation. We just have to manage it as best as we can.”
She noted, too, “It will be an ongoing problem going into 2022, but we have very close relationships with our manufacturers and we've been having that open communication so we know how much products we can order, how much products they'll allocate to our country. That helps us to manage it a little better.”
Similarly, General Manager of Sales and Distribution – Consumer at Digicel Jamaica Jeremy Owen said as a digital operator, Digicel is working around the clock with suppliers to ensure that customers get the phones they want.
“With the global semiconductor supply challenges affecting the delivery of smartphones to operators like us, our suppliers and partners have taken additional steps to ensure that our stores are still stocked with the most desirable models for our customers to choose from,” he said.
Nevertheless, he's urging consumers to move quickly in purchasing the electronics they desire for the yuletide season.
“We're encouraging everyone to make their smartphone purchases from very early in order to avoid the impact of delays and shortages that could extend into 2022.”
He told the Business Observer, “Buyers won't wait for long for that new phone this Christmas.”
Director of Communications & Stakeholder Engagement at FLOW Jamaica, Kayon Mitchell said "The global chip shortage, coupled with protracted shipping times, has had some impact on our usual supply of electronics. We now have longer wait times for the delivery of devices and as such, we've adjusted our forecasting and supply schedule to ensure that, as best as possible, our orders are placed within a window that allows for delivery in a timely manner."
She said "While we have had instances where customer demand outweighs our supplies, and delays in the arrival of materials slowing down our expansion projects, we have also implemented additional measures to mitigate this."
"As we head into the holiday season, we continue to follow up with our main suppliers and expect to have our full order of devices available to customers. We will continue to engage them as we expect this shortage to continue into 2022," said Mitchell.
In the meantime, Morrison stressed that the holiday shopping rush did not catch the ATL Automotive Group off guard. “What we had done is we had made sure that we ordered a number of our products in a significantly earlier time than we would typically order, to ensure that it was delivered in time for this peak shopping period. Some of the products didn't arrive in time, but with proper planning and based on what transpired last year with COVID we knew we just needed to ensure that we were prepared a little more in advance.”
On the consumer side she highlighted that “there has been a significant interest in our products and our services over the past couple of days and significantly higher than probably the beginning of the month or last month. But generally, Black Friday and, more recently, Cyber Monday are two high-traffic days whether there is a pandemic or not because people are preparing for the holiday season”.
She said the company is nevertheless happy with the turnout so far, noting that there has been an increase in online sales which she says is an indication that consumer behaviour has changed.
Despite the challenges caused by the chip shortage she said electronics continue to outperform the other categories, noting that the best-selling item this year is from the electronic category.
“I would say the Samsung sound bars are really performing pretty well, not just on Cyber Monday but also through the Black Friday period, and I probably would attribute that to the fact that it's a good gift but also it's manageable in terms of price for a wider range of persons,” she said.