Annual study from Coupa shows that retailers are battling
challenges on all fronts during this critical revenue period
including labor, supply chain, and more
SAN
MATEO, Calif., Nov. 17,
2022 /PRNewswire/ -- 95% of retailers think that they
cannot fulfill consumers' holiday needs this holiday season,
according to new research from Coupa Software (NASDAQ: COUP), a
leader in Business Spend Management (BSM).
Key Takeaways
- 7 in 10 retailers anticipate that supply chain disruptions will
negatively impact their company's revenue – an 11% increase from
2021.
- 93% of retailers worry a recession will reduce consumer
spending.
- 9 in 10 retailers that experienced supply chain disruptions in
2022 are concerned one or more of their company's suppliers will
shut down – a staggering 61% increase from 2021.
- 65% of retailers are currently understaffed.
Disruption and uncertainty over the past two years have been
compounded by geopolitical conflict, rising interest rates, an
ongoing pandemic, and changing consumer demand. Nearly all
retailers (98%) expect supply chain disruptions to continue during
the 2022 holiday season, with 88% predicting they will get
worse.
"Seemingly overnight, relentless shortages are flipping to
inventory surpluses in certain categories. This is further
complicating retailer's ability to orient their supply chains to
rapidly shifting consumer behaviors and evolving regulations," said
Dr. Madhav Durbha, VP supply chain
strategy at Coupa. "Retailers must pay close attention to
consumption patterns and selectively build in optionality in their
supply chain to address the changing wants and needs of
consumers."
Dipping Demand Impacts Inventory and Retailers
Demand
swings in addition to supply chain snarls are causing additional
complications this year. Many retailers are facing inventory issues
due to seasonal merchandise arriving late and shifts toward
"Just-in-Case" inventories, on top of the slowdown in consumer
demand due to the inflationary economic environment.
Despite precautions, retailers are aiming to keep their
customers shopping in their stores – 66% have or plan to over-order
products, 55% have or plan to rush-order products, and 33% have or
plan to invest in additional inventory management tools – they're
stuck with too much of what consumers don't want and not enough of
what they do. Ninety percent of retailers are experiencing excess
inventory, and 88% are already experiencing out-of-stocks on key
holiday items.
One way retailers can right-size their inventory is by
leveraging demand-shaping practices such as dynamic pricing,
promotions management, and markdowns to tackle inventory
challenges.
Shoppers Faced with Tightening Budgets
Consumers
shouldn't wait to purchase gifts as 90% of retailers plan to offer
fewer Black Friday and/or Cyber Monday deals, a 36% increase from
2021. More than half (56%) cited supply chain concerns as the
primary cause. In fact, 97% of retailers encourage consumers to
shop earlier, with nearly two in three running holiday ads and
promotions earlier this year.
"What's particularly challenging this year for retailers are the
labor shortages that have plagued businesses in 2022. Our data
confirms it: a majority (58%) expressed concerns about staffing in
the last 12 months. Labor challenges will be a compounding factor
for struggling retailers this holiday season," said Durbha.
"One-way tech-savvy retailers are counteracting these capacity
constraints is through automation. Warehouse automation and
AI-powered Digital Twins for decision support are emerging as areas
with a high degree of interest. Automation can help streamline
supply chain processes while minimizing risk and reducing
repetitive tasks. "
Coupa helps retail businesses globally control spend and
optimize their supply chains, including Walmart, Ikea, and
Lowe's.
Learn more about Coupa at www.coupa.com.
Methodology
This survey was conducted among
602 total respondents in the United
States. All respondents work in a role at the management
level or higher for a consumer retail company with 500+ employees.
The survey was conducted online from October
4th - October 10th, 2022.
About Coupa Software
Coupa empowers companies around
the world with the visibility and control they need to spend
smarter and safer. To learn more about how Coupa can help you spend
smarter, visit www.coupa.com. Read more on the Coupa Blog or follow
@Coupa on Twitter.
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SOURCE Coupa Software