How Buying Patterns Have Changed the First Half of This Year
Buying patterns have changed continuously over the last couple years at a rapid rate. The COVID-19 pandemic shifted almost everything in a rather unpredictable manner compared to what was anticipated by industry experts and economists.
The supply chain over the last several years has been disrupted by several factors. Factory and production facility shutdowns have decreased product availability and created a major imbalance between supply and demand – especially as production facilities reopened, working overtime on restocking inventory. These shutdowns and lockdowns had a huge effect on ports as well. COVID outbreaks on port grounds put workers out of commission and resulted in major grid locks on ocean port grounds as increased container ships arrived to understaffed berths.
In addition to all this, consumer demand skyrocketed when lockdowns hit and ecommerce become the primary channel for purchases. This influx of online orders for products that were severely understocked resulted in Asian manufacturers kicking things into overdrive to compensate for the disparity between supply and demand. This severely bogged down the Southern Californian ports of Long Beach and Los Angeles, and they have remained congested to this day.
While things have settled down a little, they’re far from stable. The industry remains incredibly volatile, and the first half of this year is a testament to that.
Buying Patterns Changing in First Half of 2022
Buying patterns have been affected in a variety of ways due to the effect that supply chain disruptions have had on producers, retailers, and other businesses. These factors have forced businesses to change their business models, products, and pricing – all of which have a direct impact on the consumer, thus changing demand and buying patterns in the long run.
Here are a few reasons that these changes have affected consumers:
Changing Product Makeup
Components, parts, and ingredients are incredibly difficult to acquire – especially if the source is international. As a result, food companies and manufacturers have often been left in a position to either see a degrade in product quality, or shift their production process to accommodate the inaccessibility of materials, parts, and ingredients previously used.
Several food companies have changed their recipes. General Mills has reformulated several of its products in order to continue producing at the same rate with the ingredients it has immediately available.
We’ve seen this across the board with tons of companies. The cost of shipping, delays, demurrage, production, and just about everything across the entire supply chain has increased. Unfortunately, for businesses who were already struggling in the midst of the pandemic, these cost increases get passed onto the consumer.
This is the case in just about every industry. Car prices are up as components and chips are hard to acquire. Laptop and phone prices have increased as the demand for work-from-home supplies skyrocketed amid severe bottlenecks in production and transportation. Food prices are increasing as ingredients are hard to acquire due to inventory stockpiles and expiration in prior years and the subsequent backlash in production and harvest this year.
Product Supply Chains Changing Entirely
Several industries have had to shift their entire supply chains in order to accommodate the current logistics market – furniture makers being a major one. There are myriad obstacles that manufacturers face amidst the supply chain crises of 2020-2022, and as they say, “desperate times call for desperate measures.”
This has led some producers to change their entire supply chain practices including manufacturing, countries of origin, and shipping modes. Several furniture makers have relocated their manufacturing facilities closer to home to decrease the risk of shipping delays and increased logistics costs. Also, many businesses have been forced to convert moving cargo from ocean to air in order to keep inventory restocking on schedule. Of course, these changes comes with a heavy price tag increase.
Contact our team at InterlogUSA if you would like more information regarding this topic. Additionally, our weekly market updates closely follow developments, like changes in buying patterns, each week to keep shippers in the loop.