For months, retailers and consumers alike have been grappling with supply chain issues. On the retail side, that's led to inventory shortages and higher costs to procure goods. On the consumer side, it's led to higher prices during and added struggles during the holiday shopping boom.
Now the good news is that supply chain bottlenecks have recently started to ease. But with the emergence of the omicron variant, we don't know if that modest improvement will be short lived.
The highly transmissible variant could cause a host of issues, like shuttered factories, that result in additional holdups on the product distribution side. That could lead to sustained levels of inflation and more aggravation for retailers and consumers.
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But to some degree, the supply chain crisis could actually end up working to the benefit of brick-and-mortar stores. Here's why.
Customers will need to adapt
In the course of the pandemic, many people have taken to ordering items online rather than visiting stores. Doing so was initially a safety measure, but now, in the age of vaccine availability, it's become more of a matter of convenience.
However, now that so many items are in short supply, consumers might struggle to find the things they need online. And in the absence of being able to do so, they may be more inclined to visit stores to find alternatives than to spend what could be hours searching over the internet.
Imagine a given consumer can't find their regular brand of workplace pants online. Finding an alternative could mean taking the chance on the fit of a new brand and delaying the process of building a wardrobe. In this type of scenario, visiting a store and trying on alternative options makes for a more expedient solution.
The same holds true for household items, toys, and a host of other purchases. Often, consumers get their minds set on specific products. And so when those products aren't available, it's often easier to identify a suitable alternative by physically touching and looking at it.
All of this could benefit physical retailers while supply chain issues persist. If consumers are driven to stores in the near term, they may get used to in-person shopping again and uphold that habit even once shipping bottlenecks ease up.
Of course, that would, in turn, be a very good thing for real estate investors. Right now, shopping centers and malls are struggling with vacancies. If consumers start frequenting stores, fewer closures are likely to ensue. That could help mall REITs, or real estate investment trusts, recover from the blow they suffered during the pandemic, when store closures were so widespread they practically became the norm.
Another hidden benefit
Incidentally, bringing consumers back to stores also works to retailers' benefit from a revenue standpoint. Though it's possible to lure customers into impulse buys with the right online marketing strategy, it's easier to get them to make unplanned purchases in stores. And so that, too, could be a positive side effect of the supply chain crisis that's been plaguing retail for months.
