Why Retailers Are Smart in Camouflaging Today's Supply Chain Crisis

Introduction

Nothing in the retail environment is random. When it comes to big box stores, grocery stores, pharmacies, etc., major chains arrange their stores in very purposeful ways. The goal, of course, is simple: To have you buy more! Decades of solid research into consumer behavior informs how most retailers - outside of your small “Mom and Pop” stores and boutiques - are laid out. Major retailers spend many millions of dollars annually to better understand how shoppers shop, and they use that knowledge to organize their stores in an optimal fashion. The overarching goal of all of this work in merchandising is not to make your shopping trip faster and easier. Rather, what they want you to do is spend more time in their stores, as the longer you linger, the more you will spend! And specifically, they want to focus your attention on certain items, which naturally have the fastest turnover, and quite often, the highest profit margins! All of this is very deliberate, very strategic...and it works!

How do we see all of this in action today? Research into how we shop - how we navigate stores and how we choose products from an array of selections on store shelves - is a highly sophisticated field of study. And today. We can actually say that there is a “science of shopping,” with great crossover between the world of the academic study of consumer behavior and the real world of retailing!

Today, it is entirely possible to track shoppers - without them knowing - and learn a great deal about shopping behaviors, even segmenting consumers as to how, when, how long, how much, etc. that they buy!

The layout of stores, the arrangement of goods on store shelves, and yes, the assortment of items available in the line waiting to checkout are all very calculated and well researched decisions for major retailers, all aimed at maximizing sales, revenue, and ultimately, profits!

And at the same time, retailers have learned a great deal about how to maximize sales while making the shopping experience the best it can be - for shoppers and their employees alike - in times of perceived shortages. Black Friday, which has historically been a time of retail chaos...

… now has evolved to a much more controlled, well-thought out experience in stores - and online:

In much the same way, major retailers have learned a great deal about handling the inevitable crush of shoppers seeking necessary supplies of food and more that happens every time a hurricane approaches an area, preparing their stores to accommodate the rush for water, non-perishable foods, batteries, generators, and more:

And today, something very interesting is happening in the retail world in response to the supply chain crisis, which one cannot help but hear about every time you turn on the news:

The strategy that some major retailers are employing to counter the supply chain crisis can be summed up in one word: Camouflage! And as this article will explain, it is a smart strategy to tackle a very real problem across the retail landscape today.

Camouflaging the Supply Chain Crisis

And so I watched with great interest this recent story on the syndicated news show, Inside Edition. In it, reporter Jim Moret showed how major retailers - including Walmart and leading grocery store chains - are reacting to the supply chain crisis, using large, in supply products - and even pictures of products - to fill their store shelves. In essence, they are camouflaging their empty shelves!

In an interview for the story, retail expert Phil Lempert stated that there was “method to the madness,” as when consumers see empty store shelves, this tends to provoke panic buying and hoarding, which can, of course, make real product shortages even worse for everyone - including the retailers trying to stock the products in question. This is why we see more and more retailers using innovative, but perhaps questionable tactics, such as spreading out the goods they have over wider areas (to cover gaps on their shelves from missing products) and using coolers with pictures of what is supposed to be in there masking what little product might actually be inside, in this time

Now, not all retailers are using the camouflage strategy. Across the retail industry, many firms are instead urging their customers to do their Christmas shopping early to maximize their choices now…

...and small businesses in particularly hard hit areas - including booze - are just telling their customers to buy - or face the prospect of not getting what they want for some time!

Of course, encouraging panic buying only accelerates and exacerbates retailers supply chain woes. And while it might help stores’ top and bottom-lines in the short-term, the worsening of the supply chain crisis will only make shortages in certain categories of goods worse and drive up costs for retailers and consumers alike.

Analysis

As Phil Lempert stated in the Inside Edition story, we will likely see even more such camouflaging and masking tactics from retailers as the supply chain crisis persists - and perhaps even worsens - in the coming weeks and months. And from my perspective as a strategic management consultant and professor, I can only say that I think this is a wise strategy for all retailers to employ. While certainty all retailers would want to have their store shelves stocked “normally,” for most stores today, this is just not possible. And yes, the psychology of shoppers is that seeing empty shelves does only spark more panic buying and hoarding. And thus, while consumers rushing to buy the “hottest” toys and consumer gadgets for Christmas gifts is something to be anticipated every holiday season…

... and that can be planned for even in the midst of a supply chain crisis by retailers, even if it means that certain items will just not be available...

But the rush by consumers to buy food items in particular is particularly worrisome…

... as panic buying and unnecessary “stocking up” on grocery items only serve to make what is a food supply problem even worse.

So while the usual advice would be to not cover up a business problem, in this unusual instance, this is precisely the right advice! And while from a consulting perspective, I can imagine quite a few shoppers laughing at seeing aisles and shelves where retailers have been quite inventive at trying to mask their supply issues with folding chairs and items spread out in an unusual way, such attempts to “trick” consumers into not perceiving just how bad their supply issues are at present is in fact a smart tactic for retailers today. By camouflaging their very real shortages of certain items, this will work to assuage shoppers from perceiving just how bad the shortages are for items such as paper products, food, electronics, toys, and more today. If retailers can indeed stock their stores in inventive ways to - yes, trick - shoppers into not engaging in panic buying and hoarding items in these hard to keep in stock product categories, they can not only mitigate their own supply woes, but help promote customer satisfaction with the shopping experience in the process.

And so we can expect to see more camouflaging done by retailers in the coming weeks and months as the supply chain crisis persists, and yes, we may even see some large stores not just mask empty shelves with creative stocking, but closing entire aisles and even parts of their stores (and of course, this may help retailers deal with their parallel staffing crisis by having less of their store square footage open and available to customers). While papering over, covering up, masking, etc. a very real problem is not the typical advice one would expect from a consultant, we are certainly not operating in “normal” times. And that is why today, camouflaging stocking issues is a smart - and necessary - strategy in retailing today!

++++++++++++++++++++++++++++++++++++++++++++++++++++

About David Wyld

David Wyld is a Professor of Strategic Management at Southeastern Louisiana University in Hammond, Louisiana. He is a management consultant, researcher/writer, publisher, executive educator, and experienced expert witness. You can view all of his work at https://authory.com/DavidWyld.

Social Media Links to David Wyld:

• on Facebook
• on LinkedIn
• on Twitter