Like a fear of coronavirus spreadsconsumers flock to stores to stockpile emergency supplies, leaving empty shelves unable to meet demand. This situation is likely to intensify.
Our Survey of Emergency Consumer Stocks and the Response of Retail Managers to Accumulated Behavior, has important information for retailers and politicians on how to plan the coronavirus pandemic.
The psychology behind consumers
Consumers accumulate goods for various reasons: it can be in order to profit or prevent losses, and the goods may be intended for ordinary consumption or non-traditional use,
Consumer stocks in the face of the COVID-19 pandemic can be seen as unconventional stockpiling, primarily designed to minimize the perceived threat of loss or fear of being left without it.
Consumer stocks can also be explained using product theory and prospect theory. The theory of goods suggests that the value of a product is positively related to its deficit, perceived deficit can stimulate accumulationPerspective theory describes how people risk appetite when choosing between vague alternativesTo avoid potential losses in the face of uncertainty from an outbreak of coronavirus, consumers can accumulate or accumulate essentials.
Consequences of accumulation
Consumer stocks have a direct and long-term impact on retail operations. In the early stages of an outbreak, retailers may increase product availability pending warehousingHowever, depending on readiness for deliveries, warehousing may soon lead to a retail sale, with the deficit remaining for several order cycles.
For example, our study of hurricane reserves shows that stockpiling affects the availability of bottled water in the store even a few weeks after a hurricaneOther researchers found that retailers took considerable time recover from supply disruptions after the 2010 earthquake in Chile and the 2011 earthquake in Japan,
Consumers Must Know price increase with the accumulation of basic necessities,
As retail inventories decline, prices rise for at least two reasons.
First, since goods are sold out at a lower price, consumers must buy alternatives at a higher price, also known as product substitution effects.
Secondly, sellers can benefit from an imbalance in supply and demand and increase prices. Retailers can also raise prices because their suppliers have, thus increasing the cost of supply chain,
In general, as a result of the stress caused by coronavirus, a shortage of supply may prompt consumers to pay higher prices.
Different types of retailers
When it comes to warehousing consumer goods, Our study reveals significant differences among retailers,
We find that pharmacies are associated with the highest consumer tendency to stockpile before hurricanes. They carry a large number of essentials that consumers can store before emergencies, such as bottled water, recipes, and personal care products.
However, after the hurricane passes, consumers can find the best product availability in grocery stores and a warehouse of clubs. On the contrary, discount and dollar stores are associated with the lowest availability of essentials within a few weeks after the hurricane.
When demand exceeds supply, distributors can distribute goods among their best and most reliable retail customers, leaving low-margin retailers without inventory.
In general, the high availability of goods in the store is associated with fast commodity circulation short processing time, characteristics of retailers with fast recovery options.
As stocks of staple foods accumulate, consumers display another interesting behavior. They usually shop at national retailers with extensive retail chains. National retailers have a larger supply of goods in their networks, which means that they can respond to regional demand shocks by sending inventories from outside the affected regions.
For example, using data from the United States, our study found that as the chain of national stores grows from about 600 to 7,300 stores nationwide, consumers are more than doubled up to hurricanes. Thus, a store from a network of 7300 stores experiences a doubling of consumer savings compared to its operations in normal times compared to score from a network with 600 stores.
However, transportation costs can limit the retailer’s susceptibility to regional shortages, so affected retail outlets from these national chains can sell necessary goods, even if other stores in the chain have excess stocks of the same goods.
Unique coronavirus problems
Both retailers and local governments are faced with problems caused by the accumulation of consumer stocks in the event of emergencies such as the coronavirus pandemic.
Compared to more predictable environmental emergencies such as hurricanes, the spread of the coronavirus pandemic is difficult to predict. A widespread outbreak of coronavirus can also lead to global shortages on a larger scale than hurricane events, making it difficult for retailers to move inventory around their networks to meet regional needs.
Hurricane forecasts, on the other hand, can only be made in a few days. Coronavirus progression can be measured over weeks or months, giving retailers and their suppliers extra time to prepare for potential accumulation behavior.
Politicians may be able to influence both demand and demand for critical products through public announcements and recommendations, thereby changing the behavior regarding stockpiling and the habits of retail stocks.
Retail supply chain managers can pay close attention to changes in the coronavirus pandemic, such as the number of diagnosed cases and the number of deaths when they decide on stocksAnd consumers, especially older people, may be encouraged to stock up on the early stages of a coronavirus outbreak. to avoid unnecessary trips outside the home when the virus spreads,
In general, collaboration and communication between government officials, emergency organizations, retail managers and consumers may contribute to better distribution of essential materials in the context of the coronavirus pandemic.
When the coronavirus becomes stiff, it accumulates (2020, March 13)
restored March 14, 2020
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