How COVID-19 Led to the Appliance Shortage
You may be surprised to learn that COVID-19 led to an appliance shortage across the U.S., and throughout all brands. This unprecedented event impacts budgets and puts additional strain on families trying to navigate the pandemic's ever-changing effects.
As people choose to repair a washing machine or refrigerator over replacing their home appliances, they face yet another hurdle; capable service technicians are hard to come by. Moreover, this abundance of work brought out the worst in some companies, and many customers have fallen prey to their tactics.
We spoke with members of our team, industry leaders, and our customers in order to gain better insight on how the appliance shortage has impacted them.
What’s Causing the Appliance Shortage?
Recently, my daughter asked me a good question, "What does backorder mean?" It turns out I've been using the word excessively during my conference calls and she began to catch on. I sat down to explain the meaning of this retail term; when a product is temporarily not available, and if the replenishment is on its way, we deem a sales order on backorder (instead of readily available to ship.)
Unlike the toilet paper debacle, it’s doubtful that people started hoarding appliances in the beginning of the pandemic. So what exactly caused the shortage and backorders in the appliance industry? There’s no one, cut-and-dry answer to this question. However, there are a number of factors that have led to the shortage.
1.COVID-19 Related Shutdowns
Most appliance manufacturers were forced to shut down their plants during the heat of the COVID-19 pandemic. Once it was safe to reopen, the manufacturers had to reconfigure their work areas to ensure their employees would remain safe while working. Although many of the plants are now back up and running, many are doing so with a reduced crew due to social distancing guidelines.
Nearly all manufacturing facilities are running with only a portion of their crew, in order to ensure that all employees are adequately spaced out while working. Because many of these factories still aren't back to running at 100% capacity, there is now a backlog of orders at appliance dealers.
In addition to factory shutdowns, many states put a halt on non-essential construction projects in the heat of the pandemic. Now that manty construction jobs have resumed, there's a much higer demand for appliances.
Many factories in Mexico took particularly long to open because of the country's extended shutdown. Therefore, companies like Electrolux and Frigidaire who were already running behind on production before the pandemic, were hit even harder.
2. Supply Chain Issues
It’s hard to think of an industry that hasn’t been impacted by the COVID-19 pandemic. Beyond the appliance manufacturers having trouble keeping up with the increased demand for product, their suppliers are also facing setbacks. After all, if manufacturers can’t receive the parts they need to make a product, the manufacturers can’t supply appliances to the dealers.
Many manufacturers have also seen delays in processing cargo and truck shipments. This is particularly true for those crossing the US/Mexico border, as both countries faced extended lockdowns.
3. Increased Demand
With everyone spending more time at home because of the pandemic, it’s easy to see why the demand for appliances has gone up. This is partially due to everyday wear and tear on appliances that were at the end of their lifespan. Because most people are cooking more than they have in the past, and doing laundry more often, appliances that were nearing the end of their lifespan now need to be replaced.
Additionally, people have had a lot more time to think about what they want their home to look like. And because vacations and big life events have been put on hold, many have chosen to put that extra money into renovating their homes. This, coupled with the fact that home sales have increased by 25%, means that more people than ever are in the market for new appliances.
After talking to members of the Designer Appliances team, there seemed to be three types of appliances that are in particularly high demand - refrigerators, dishwashers, and laundry essentials.
What Are Manufacturers Doing to Help?
Although some appliances may be harder to come by nowadays, this doesn't mean manufacturers are asleep at the wheel. Most manufacturers rushed to reconfigure their factories to ensure social distancing protocols were being followed so that production could continue.
GE even added extra shifts for around-the-clock production, in an effort to offset the effects of the appliance shortage. When asked about the appliance shortage, a top manager at GE told us he even jumped in to help build dishwashers when the company needed extra manpower.
How the Appliance Shortage Brought out the Worst in Some Service Providers
As is the case with many crises, there is always someone looking to take advantage of the situation. After speaking with friends and colleagues, we've heard horror stories about third party service providers showing up to a service call only to find a reason not to perform maintenance on the appliance.
Volfi Mizrahi of New York City needed service on a washing machine after running into trouble with a new model. When the service provider arrived at Mizrahi's apartment, they informed him that they did not want to unstack the washer or call the building manager for help. Although the majority of washers and dryers in NYC are stacked due to spacial concerns, the service provider did not ask Mizrahi of the configuration before showing up to the apartment. In this case, the the service had to be paid for despite the fact that it was never completed.
Unfortunately, Mizrahi's story is not an isolated incident. We've heard far too many stories of third party service providers making multiple trips to a home in order to collect more money from the customer or manufacturer.
Here are some tips to avoid being taken advantage of:
- Initiate the service call with the manufacturer to ensure you're dealing with a licensed, reputable service provider.
- If your product is covered by a warranty, ask the provider if there will be any out-of-pocket costs. (FYI: If a product is under warranty, there should never be out-of-pocket costs - unless the issue is cosmetic.) It's also a good idea to get this information in writing.
- If the service provider tries to charge you a fee, send the bill to the manufacturer.
How is the Appliance Shortage Affecting Customers?
Because the lead time on securing your dream appliances is a little longer now because of the shortage, there’s now more to take into account when coming in to look at appliances.
“Usually, when I first meet a customer, I always inquire about where they are in their project at the moment,” said Sales Representative Cinthya Guallpa. “If they said they were still about three to four months out, I would always give them space to really think about models/brands prior to suggesting ordering. Now due to COVID, I find myself going over realistic dates and really stressing dates and backorders in order for us not to run into further delays. I’m also asking about their designer/contractor so I can also work with them in helping the customer decide sooner rather than later.”
The good news is that the delay in getting the appliances may not be as big a setback as customers initially assumed. “Kitchen designers are telling us they are seeing eight to ten weeks for cabinetry and other items so that’s the timing of many projects. So it’s not like the appliances are going to hold them up, everything is taking a little longer,” said Director of Partner Experience Tracy Kuchar. “I would say if a customer is planning their dream kitchen and they’ve waited a long time for it, then most are willing to hold out for their preferred products even if it means a few extra weeks.”
Our Advice to Customers
Sales Representative Eileen Sroka recommends that customers remain open to alternatives in case their preferred brand is unavailable. “I get at least five calls a day for a Bosch dishwasher, but there are some alternative dishwashers available,” Sroka said. “Bosch dishwashers are unavailable right now and we don’t know when they will become available. But a good substitute for that is a Miele dishwasher, which is right now immediately available. There’s currently a rebate on it and it’s also a high-quality European dishwasher.”
She also recommends that once customers find the appliances of their dreams, they place their order as soon as possible. “Once you order, you’re getting yourself in line for the products,” Sroka said. “So if you wait another week, that’s another week of other people ordering and getting in front of you.”
Although our world is constantly changing, the professionals at Designer Appliances are here to help you design the home of your dreams. We invite you to stop by one of our New Jersey showrooms where our expert sales team can guide you through the process.
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