How CE and Appliance Retailers Counter COVID’s Domino Effect
Dealerscope: How is the global chip supply shortage situation tracking these days relating to the consumer electronics and/or major appliances product categories? Which categories are hardest hit? What is the most disruptive aspect of this situation: product supply or product pricing hikes (or something else)? When do you expect the situation to improve — later this year, or not till 2022?
Jon Abt, Co-President, Abt Electronics & Appliances, Glenview, IL: It is getting rougher. Seems like each day, we hear news of it affecting a new product segment. Of course, it’s expected in consumer electronics like computers or smartphones. But now it’s causing shortages in everything from microwaves to dishwashers. So many appliances today are smart — there’s a computer chip in just about everything. Unfortunately, there’s no indication that it will improve any time soon. We’re hoping the constraints ease sometime this year, but info coming in keeps changing.
Tom Campbell, Chief Technologist, Video and Audio Center, Santa Monica, CA: There are a number of issues at play. When COVID first hit, our founder, Joseph Akhtarzad, thought there might develop a huge pent-up demand. So he opened up additional warehouses and we stocked up very heavily. So that’s helped us. But there have been shortages, for a couple of reasons. One is the demand on the chips – the automotive industry, as you know, uses a lot of chips. And sales of TVs and appliances have been way beyond expectations. So demand has driven chip prices up. And that’s affecting more of the entry-level products. Another thing is that we’ve been told that docks operations are looking for workers – there’s a shortage. In Long Beach [Calif.], at the ports, the containers have been stacked up sky high. So it’s not just the making of the products but it’s also getting them delivered. That’s been another challenge. So we’re telling people they should really be buying now, because we think prices will continue to go up for at least another year, at least until the chip shortages abate. There are more chip factories opening up to try getting ahead of the curve but it can’t be done overnight. We are getting product, but it’s a challenge.
Bob Cole, Founder/CEO, World Wide Stereo, Montgomeryville, PA: The chip shortage is a drag. To some degree, it affects us with receivers… Preamplifiers and music streamers were also affected.
A lot of it has to do with supply and demand, and the demand is so high, they can’t keep the supply up. My biggest concern is that it hinders innovation; they’re so busy trying to fill orders with the current stuff, there’s been a slowdown in new, innovative products, in my opinion. But then again, [vendors] find better, more efficient ways to manufacture.
COVID is a very big piece of [what’s coloring] this demand. On some level, the bar is lower – [consumers have been] almost used to not getting what they want [due to backorders and shortages], especially at the beginning. It was really hard to get product, and everything was slow. People may have wanted a particular product, but we didn’t have it and they asked, ‘Well, what do you have?’ and they bought it. In many cases, that was great for us, because we sold a lot of stuff on hand. Someone wants to spend $500 or $600 for a receiver, and you don’t have anything under $1,000 — and they take it.
I think [supply] will be better by the holidays, or maybe not till next year. I believe demand will continue to be very high — it hasn’t been high like this since the ’80s.
Eden Goldberg, Vice President, Marketing & Business Development, InMotion Entertainment Group, Las Vegas, NV: We are seeing some product launch delays in terms of supply, and a couple of partners have spoken of possible price increases.
Comments
Post a Comment