One of the main fronts analyzed when measuring the quality of a company's logistics service is the availability of its products in stores. Having products ready for sale always leaves consumers satisfied and improves the company's image, right? It is no wonder that companies are always prepared to forecast the demand for their products as accurately as possible and produce stock levels capable of meeting their buyers. Well, some large companies apparently have constant difficulties in providing the products that their customers want, with launches that are unable to meet the demand for their products.
This happens a lot with Apple devices. The company has been dealing with a lack of products to meet demand for a long time, in many of its major launches. Several of its devices disappeared from the shelves in the first days of sale, including the iPhone 4, iPhone 5, iPhone 5S, Apple Watch 1 and 2…. And this is not a thing of the past, since its new smartphone, the iPhone 7, is also missing in several places around the world, both the standard version and the Plus model. The queue to get one can last several weeks in some markets, and believe me, the case is even worse if it is a “jet black” model. There are those who attribute product shortages to the difficulties of manufacturing a technologically advanced device, but at this point, after so many releases and experience in this market, it is difficult to imagine why the apple giant would have so many problems meeting the demand of its fans.
Figure 1 – Apple website shows iPhone 7 unavailability
Source: Apple
Another very clear case is that of Nintendo, a traditional developer of electronic games. On the 11th, the company launched a miniature version of its first console, the NES, with HDMI connections for modern televisions, and 30 classic games in memory, at a very attractive price of US$59. However, it is practically impossible to get one, since the product is sold out in all American territory, and not because of a huge demand, but mainly because Nintendo sent very few units to retailers in the field. Several large American stores received less than 10 “miniconsoles”, that is, they were left with extremely low stocks even before making the first sale. It's hard to understand this small launch, especially since the announcement of the retro video game in July was well received by the public and retailers. The product already sells for three times as much on sites like eBay.
This isn't the first time that Nintendo products have disappeared from shelves and left its fans frustrated. The company lived for a few years with the scarcity of the Wii, launched in 2006. Another example is the amiibo line, small dolls that interact with games, which entered the company's portfolio at the end of 2014. This case is so emblematic that the company With each announcement of new characters for the series, fans are already rushing to secure their units in pre-sales, some people are already looking to order large volumes to resell on the black market, and shopkeepers are trying to create measures against these people's ideas (such as limiting units purchased per individual) so as not to disappoint a large number of potential buyers.
Figure 2 – Amiibos and the NES Classic Edition, two Nintendo products that failed to meet fan demand at launch
Source: Nintendo
The high number of situations in which the products of these large companies go out of stock, often due to minimal quantities being sent to stores, leads many people to wonder if this would not be a marketing strategy to promote their launches, making the public believe that they are very high demand, “exclusive” items, and that is why there are shortages, in addition to encouraging fans to buy in a hurry in the first few days, so as not to lose their units. Another consequence of the lack of supply is the highlight in the media, with articles about shortages, like this one, being published in major vehicles (just see the references). In plain English, it's as if the lack was deliberate to cause a “buzz” at the launch and draw people's attention to the new products. Apple itself has already released notes denying such accusations (obviously, this would not be a widely publicized strategy), but whatever the reaction of people, it is a kind of free promotion of their products. So that might be a good explanation, but does it make sense?
First, it is necessary to understand that the consequences of the lack of a product vary greatly according to what is being sought by each customer. If the buyer is looking to drink a can of soda, and his favorite flavor is not available, he will very likely buy something else to drink, much to the manufacturer's misfortune. Companies like Apple or Nintendo, however, have a long legion of fans who have a lot of appreciation for their brands, built up over several years. Its products are unique and innovative, therefore more difficult to replace. In this case, it is even more likely that their buyers will simply postpone buying the same product, so these companies can afford more the luxury of not always having full shelves (lower stocks can also bring financial benefits).
It's hard to say what the limit of customers' patience is, which leads to the question whether the benefits generated by the media attention to flawed releases outweigh the damage caused by the dissatisfaction of their fans. It is possible that with quick replacements after launch, this will work, which requires great efforts and good planning by the marketing, commercial, production and logistics teams. And of course, it all also depends on how well the product launched fulfills its promise, and makes the eventual wait worthwhile. In this sense, Apple and Nintendo have managed to sell their products and continue to have many fans around the world. But the Christmas sales are right around the corner, and it looks like a lot of people won't be able to get the iPhone 7 or the classic NES. If the absence was deliberate, was it worth it?
References
<http://www.mirror.co.uk/tech/apple-faces-global-shortage-jet-8923874>
<http://actualapple.com/the-shortage-of-iphone-7-and-iphone-7-plus-may-persist-until-next-year/>
Fernando Chalréo
He has been working on consulting projects in Logistics and Supply Chain for 5 years, with experience in companies in the consumer goods, retail and food and beverage sectors. Types of projects already carried out: Sales & Operations Planning, Inventory Management, Network Planning, Business Process Review, Logistics Indicators and Transport Management
