BUSINESS + ECONOMY

Analysts expect supply chain problems to boost sales at brick and mortar stores

Nov 26, 2021, 7:57 PM | Updated: Nov 28, 2021, 3:51 pm
(City Creek Center on Black Friday.  Photo: Paul Nelson)...
(City Creek Center on Black Friday. Photo: Paul Nelson)
(City Creek Center on Black Friday. Photo: Paul Nelson)

SALT LAKE CITY — Supply chain problems and online bots are causing headaches for holiday shoppers on this Black Friday.  Some economic analysts say it may be a better idea to shop in-person than online, this year.  However, scalpers seem to be trying to take advantage of brick and mortar stores, also.

Supply chain problems creating bigger crowds

It appears the crowds have decided to return to the big box stores for Black Friday.  It’s too soon to know how much Americans spent over this holiday weekend. However, shoppers like Mike Pratt say it wasn’t fun facing the crowds.

Pratt said, “I tried to go shopping, this morning, after I got off work and it was just way too crowded for my liking.”

Other people shopping at City Creek Center say they don’t expect to find any significant deals for their holiday shopping.  They tell KSL they would rather not deal with online retailers since they can’t be certain their gifts would arrive in time for Christmas. 

Analysts from CNN say it may be preferable for people to do their shopping, in-person, since it may be easier to find alternate presents if they can’t find the specific item they’re looking for.  They also report consumers saw two billion “out of stock” messages in the month of October. And retailers can better manage their inventory when it’s in their stockrooms.

For some stores, initial Black Friday sales look really good

Dan Young, founder of PC Laptops, says customers flocked back to his stores for Black Friday.

“In the first two hours of being open, today, we sold more than we did, pretty much, any day ever in 30 years,” Young said.

However, Young acknowledges he’s in a different position than many other retailers.  He recently received large shipments of inventory to put on his shelves. However, he had to wait a very long time to get it.

“We placed our order half a year ago for a lot of our stuff.  The good news is that it all landed last week, so we’re a lot luckier than a lot of the other people,” Young said.

Scalpers and crypto and bots… oh, my

Aside from the supply chain crisis, consumers have a lot of other problems they’ll need to worry about this year.  Young says scalpers are still using bots to purchase large amounts of electronics online, then reselling those items at double the price.  Retailers are trying to upgrade their online sales systems to prevent this from happening. However, Young says scalpers are constantly modifying their bots and it’s hard for stores to keep up with the changes.

He said, “If you can land five video cards, you could make $5,000 to $10,000 in an hour.”

Plus, Young says cryptocurrency mining is making it harder for people to buy computers.  He says there’s an abnormally high demand for graphic processing units since those are used to do mathematical calculations for crypto mining.  Young says people have tried to buy up to 200 computers to mine crypto at a large scale.

Can the supply chain problem be solved before Christmas?

Is there any reason to believe retailers will be able increase their supplies in time for Christmas?  Young has his doubts.  He says scalpers aren’t exclusively relying on bots to snatch these items before the general public. But scalpers are waiting in line for hours, if not days, to buy as many electronics as possible.

“There is probably not going to be a lot more,” Young said.  “People are buying and scalpers are going into retail stores, not bots, but physically coming in.  We try to have our employees screen those, if they just want to buy components.”

However, Young says there’s a way for shoppers to use bots to their advantage.  Customers can search through Twitter to find companies that use bots to scan retailers for when new products arrive and when they’ll be sold. And as long as their Twitter notifications are on, people will be told when they can purchase the item they’re looking for.  It’s not a completely fail-proof method, but Young says it helped him buy a PlayStation 5 for his daughter.

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Analysts expect supply chain problems to boost sales at brick and mortar stores