Less Variety; choice takes it on the chin from Coronavirus

There used to be a story, probably apocryphal, about an immigrant, who upon arriving in the United States, went to the grocery store to purchase food. Accustomed to finding scarcity in their home country, the person became overwhelmed by the sheer number of choices and passed out.

Whether the story is true or not, it says a lot about the abundance of variety in American stores and e-commerce websites. At least, until now.

There is an interesting article on the subject by Bloomberg writers, Jordyn Holman and Lauren Coleman-Lochner. Titled, “Shoppers Used to Have Endless Options, Then Came Covid-19,” the authors focus on ready-to-wear, but I believe the issues apply, no matter what your business.

See if this quote from the article strikes a chord:

“Thanks to a global pandemic on top of a trade war, American consumers are finding their once-endless array of apparel choices are quickly disappearing. There’s disruption everywhere — from manufacturing and shipping delays to store closings and plummeting consumer demand — and merchants are desperate to avoid accumulating piles of hard-to-sell items. This means chains are ordering less merchandise and cutting slower selling products from their aisles and websites.”

It is not surprising. I am hearing that O.E.M. toy manufacturers in China are demanding increased advances before producing products. Their concern is not so much that retailers will go bankrupt (although that is a worry) but that they will cancel orders before they ship, leaving manufacturer stuck with the products. I am also hear that the worry is so high among manufacturers in China that Hong Kong is underwriting receivables insurance upon which they can draw.

Making things worse is a shortage of container ships as containerized freight companies limit their exposure by not having too many ships in service. As a result, it has become challenging to secure a container. Once done, freight forwarders are checking with retailers to make sure that the purchase orders are going to be honored before they will ship.

All of this results in an understandable reluctance from O.E.M. providers, toy companies and retailers to commit to a broad array of inventory. Better to make, ship, and sell a narrow line of products than worry about overstocks or canceled orders.

We, both as professionals and consumers, have grown accustomed to an ever-widening array of products. At least for now, reduced variety is becoming the new normal. Whether or to what degree that will continue after Coronavirus is defeated is anybody’s guess.

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