Planning to swoop in at the last minute and nab some toys to put under the Christmas tree? If you’re aiming to buy them online, good luck.
Out-of-stock rates on online shopping sites are 10 to 15 percent higher this holiday season than they were last year, according to Adobe, whose software is used by many large retailers. Adobe found that on Monday, out-of-stocks were at 14 percent, meaning that 1.4 out of every 10 product views showed an item out of stock. That means out-of-stock items that day were as high as they were on Cyber Monday — only now, with Christmas just around the corner, it’s harder to come up with a gifting Plan B.
Adobe found that out-of-stocks are especially prevalent in the toy category. In particular, they called out Star Wars toys, the Barbie Dream House and items from Paw Patrol and Shopkins as being hard to find. Another toy that Adobe found to have high out-of-stock rates is the Pie Face game, a new toy from Hasbro in which players get splatted in the face with a heap of whipped cream. This item, on several “hot toy” lists this holiday season, is currently unavailable on the websites of Target, Walmart and Toys R Us. It is available on Amazon.com, but only if you’re willing to wait until January to receive it.
The relatively empty digital shelves could in part reflect the strong momentum in the toy category right now: The industry is on pace for its best sales growth in about a decade, according to market research firm NPD Group, thanks to a burst of technological innovation and major interest in movie-related toys tied to films such as “Star Wars: The Force Awakens,” “Minions,” and “Jurassic World.”
But the out-of-stocks are also likely a symptom of retailers’ struggles to get their inventory strategies right in an era when shoppers are ping-ponging between digital and in-store shopping.
“With each step forward, we uncover problems of the past that retailers just haven’t fixed yet, and inventory placement is a big one that retailers have not fixed,” said Steve Osburn, a partner at the consultancy Kurt Salmon who studies retail supply chains.
As part of their effort to get your online orders to your doorstep more quickly, retailers are pushing to use their stores as e-commerce fulfillment centers. So merchandise that is stocked in stores is now sometimes packed up and shipped to an online shopper’s home or is used to fill a “click-and-collect” order, in which a shopper orders online and picks up the goods at the store. That has introduced a new complexity to staying in-stock online: Your inventory is dispersed widely, and it’s hard to know how much of it will be plucked off the shelf by in-store customers.
In some cases, the out-of-stocks may also be related to the industry’s efforts to move to what’s known as “just-in-time inventory.” In this model, retailers try to keep a leaner inventory that they hope more precisely reflects exactly what they will be able to sell. The goal of just-in-time inventory is to hang onto more cash and to make sure you don’t end up with excess items that eventually have to be sold on clearance for a lower price.
But retailers still haven’t gotten this quite figured out, and “the holiday season is when the chinks in the armor start to show really badly,” said Kurt Cavano, chief strategy officer at GT Nexus, a company that builds supply chain management software.
Tamara Gaffney, the principal analyst at Adobe’s Digital Index, said that the emptier digital shelves also could be an indication that retailers have front-loaded more of their inventory — and their most alluring discounts — in the early days of the shopping season.
That would make sense given the changing cadence we’ve seen for some time now to the holiday shopping season. Retailers have been spreading out major sales over the entire month of November. They typically say they’re doing this because it’s what consumers want, and indeed, there’s some evidence for that: In a survey conducted last month by the National Retail Federation, some 57 percent of shoppers had already begun their holiday shopping by early November.
But that’s not good news for the legions of procrastinators who still have gifts to buy. In a survey NRF published on Dec. 15, only 10 percent of consumers said they had finished their holiday shopping. So that means millions of people are likely going to be scrambling to stores and websites in these last few days before Christmas.
It’s also interesting to note that out-of-stocks throughout the season have been highest on Mondays. The highest rate so far this season came on Dec. 14, when 16 percent of product views showed an out-of-stock. That was followed by Monday, Dec. 7th, when the rate was 15 percent, and then Cyber Monday and Dec. 21, which each had a 14 percent out-of-stock rate.
That may be a sign that we haven’t changed our online shopping rhythm much, even as smartphones and tablets have it made it easier to shop online anytime. Holiday-season Mondays have been important for online retailers since the earliest days of online shopping, when people often made e-commerce purchases from their desktop computer at the office after a weekend of browsing the stores.
(Jeffrey P. Bezos, the chief executive of Amazon, owns The Washington Post.)