Holiday season toy, gaming supply chain facing ‘crazy’ crisis

Entertainment

ROCHESTER, N.Y. (WROC) — You may want to get started on your holiday shopping a little bit earlier this year, especially if you have little ones. It may seem like you hear that every year, but this season is a little different. Supply chain issues across the country are having an impact on all sorts of consumer goods, specifically toys and games.

“It’s a real recipe for disaster. There’s a multi-dimensional problem that’s going on here and we’re all facing the consequences of it. It’s like whack-a-mole, you smack one problem down, it’s like bam, another one,” said Steven Carnovale, an Assistant Professor of Supply Chain Management with Saunders College of Business at the Rochester Institute of Technology. “Then another one pops up. It’s pretty crazy right now.”

Carnovale said there are a few reasons we may be seeing this problem. For one, demand has been up for games, toys, and electronics, as more people are at home during the pandemic. 

“Warehouses are filled up to the brim and they’re having a difficult time, because when COVID happened, there was a huge shift towards online consumption. At the same time, a lot of the freight companies said ‘Well, we don’t need any more freight. Shut it down,'” Carnovale said. “They didn’t take into account that people were gonna say, ‘Well, actually, I’m still gonna need stuff. I’m still gonna need food. I’m still getting the product, except I’m gonna buy it online now.”

He also said many toys come from Southeast Asia—generally China—where transportation stopped going back and forth as much during the pandemic with changes in consumer spending. “One of the things that stopped going to China were empty containers, which of course are critical to bring products back,” Carnovale said. “We’re in October, but the products that you see on the shelves were typically ordered probably sometime in August.”

He also said that some of the more complex toys require semiconductor chips, coming from another industry plagued by shortages. “There’s been a semiconductor shortage for about six to eight months. Now it’s impacting auto. It’s impacting iPads and computer personal devices so that there’s a rippling effect,” Carnovale said. “It’s not even the important chip. It’s these little display drivers, the thing that connects the smart piece of that technology to what we see.”

The supply chain crisis is impacting businesses of all sizes, including large ones, like Target and Walmart, but also local, small businesses.  Matthew Vercant, the owner of Just Games in Rochester, knows this firsthand. “Supply chain stuff has been really crazy this year. We’ve been buying holiday supplies since March,” he said. “It kind of started last year, but it got bad in March, and this year, I can’t think of a fourth-quarter release that isn’t going to be impacted, to the extent that some of them aren’t going to be here until January or February of next year.”

Vercant said they were recently told by a manufacturing partner that some of their products weren’t going to arrive on time, something that is difficult to hear before the holidays. “This next release that’s coming up in November is the first one where they said, ‘Hey, our guaranteed number—we can’t get any of that to you in time,’” Vercant said. “There’s been things like that, that are going from really consistent, large companies with great logistics, are still just not able to get it to retailers on their dates. And I think that’s only going to get worse over the next couple of months.”

The business owner said this means some products aren’t there for customers who are expecting them. “To a certain extent, people are understanding,” he explained. “But it might end up meaning in many cases, that by the time we do have it, the interest in that product is much lower.”

So what can you do as a consumer this holiday season? Supply chain experts have a few tips. No. 1, they recommend shopping early, meaning before Black Friday. But also, be ready to grab an item when you see it. “Be on the lookout and if you see something, if you need a specific thing in mind, go out and just be ready to grab it when it’s there,” Carnovale said. 

For tech products specifically, Carnovale recommends looking outside the box and exploring companies you don’t always use. “Look carefully at secondary markets. Things like Craigslist, eBay, and other things like that,” he said. “Do your homework and be careful with the transaction, but I think those secondary markets, sometimes people forget, and they provide opportunities to access products that otherwise potentially could be in scarcity.”

Experts also recommend having a backup plan for kids, in case the gift they really want isn’t in stock this season. “If you’re looking for a game like a monopoly, we can suggest six things that are just like it,” Vercant said. “This is gonna be the year to kind of focus your search, and I think you’ll have a pretty good chance of getting it. It’s just gonna take more time and a little more patience.”

Experts also say consumers could pay a little bit more this year if the items are scarce. “Scarcity typically drives demand. Demand typically drives price, particularly when the supply is low,” Carovale explained. “If it’s something where you’ve got everybody wanting it—low availability—the retailer who has it is going to profit off that.”

For those looking to buy toys this holiday season, you can expect larger, bulkier toys that are harder to transport to be the most scarce, along with items that are new to the market. This includes toys like the newest lego set or L.O.L. doll. 

To help with the ongoing supply crisis, President Joe Biden announced last week that the Port of Los Angeles would start operating 24/7 to help clear traffic jams and shipping container congestion. Companies like Walmart, FedEx, and UPS have also agreed to extend hours to help move goods. 

Copyright 2021 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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