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CE & Appliance Retailers Facing ‘Severe Supply” Problems As Stock Dries Up

Consumer electronics retailers are facing a major shortage of stock in May according both manufacturers and suppliers with both online and instore operations set to be hit.

The problem is not just component supply for products it also involvers major shipping problems in getting stock out of China according to several organisations that ChannelNews has spoken to.

Graeme Reardon the Country manager for D Link said that his warehouses are now “empty” after a surge in demand for Networking gear with new stock set to be delivered in June.

Stock that has been available during the past few weeks was ordered months ago and pre COVID-19.

Chris Lau the CEO of Laser said that all his shipments of webcams as well as mice and keyboards have been “gobbled up” by retailers with no new stock due for several weeks.

Also struggling to get stock is Sydney based distributor Ayonz who are also facing a problem with returns for their TV’s.

Several PC brands including Hewlett Packard, ASUS, Dell, Microsoft with their Surface are facing serious supply problems due to components such as Broadcom processors which are widely used in PC’s and smartphones.

Several notebook suppliers have told ChannelNews that new supplies of their products will not reach Australian retailers till late June or “At the earliest July”.

COVID-19 is “severely restricting business operations” said a major supplier of products to JB Hi Fi and Harvey Norman. “We will not see any supply until at least July as stock is going to other markets other than Australia. Our market is taking second place to large European and US markets.

Sydney based KPMG said recently that consumers who normally fill malls and shopping centers haven’t disappeared. They may be more conscious of expenditure and buying different products, but they are still shopping.

The queues are invisible but they’re crashing servers and online fulfilment processes around the country. The only problem that online traders such as Kogan are running out of stock.

Recently Kogan moved to taking orders with promises of mid-May fulfillment, now these orders are looking to be more June than May said one supplier to Kogan.

KPMG said that many ecommerce channels cannot meet the current demand – meaning lost sales due to supply problems.

They said that categories that have been slow to move online are now needing to ramp up their capability and capacity, and quickly.

The industry as whole needs to act fast and deliver creative solutions to widen access to the channel.

Some of the ways retailers are dealing with this new demand is through converting stores to dark stores, creating click and collect pop-ups, ramping up phone ordering if ecommerce platforms are unstable, converting store teams to local delivery teams and partnering with other retailers. While these solutions are inelegant, it enables revenue to keep flowing and people to remain employed through the lockdown period.

Also facing supply problems are appliance retailers with European brands such as Smeg, the Chinese owned AEG, Bosch and Electrolux facing big supply problems due to the closure of European and Chinese factories.

Several of these suppliers have already laid off staff in Australian with two European brands telling retailers that it will be August before they see new stock.

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