Global supply chain issues are coming for your gift list.
With no end in sight to the bottlenecks and delays hobbling factories, ports and warehouses around the world, retailers are pulling all the stops ahead of the holiday shopping rush.
Amazon said in a recent blog post it’s been investing in “people, aircraft, ships, and buildings” to work through the current transport snarls, and said its recent profit slump will likely continue into the holiday quarter due to supply chain disruptions. Walmart, Costco and Dollar Tree, among others, say they have been chartering their own vessels to bypass backed-up logistics hubs.
In countless corporate releases, producers and sellers alike have sought to reassure both customers and investors that pandemic-linked supply chain troubles won’t put a damper on the crucial holiday shopping season.
But with logistics experts warning world trade may not return to normal until well into 2022, and several companies announcing price increases to cope with added costs, consumers too may need to resort to some alternative tactics this year.
Here’s what to know about expected shortages, Black Friday deals, and what to do if you can’t find what you’re looking for.
What will likely be in short supply
It’s hard to say exactly which items will likely be missing from store shelves, or in which sectors and cities. With so many variables affecting complex supply chains, shortages can vary significantly across brands and retailers. Still, here are some broad categories that have been heavily impacted by logistics troubles.
Toys
With more than 85 per cent of toys sold in the U.S. manufactured overseas, the country’s Toy Association has been urging parents to shop early to side-step a potential nationwide toy shortage.
Hasbro, the maker of “Transformers” toys, Nerf blasters and Bayblades, said Oct. 26 that global supply chain disruptions had cost it about $100 million in lost toy orders in the third quarter of the year and would likely amount to another hit to sales during the holiday shopping season. The company has also said it implemented price increases in most markets in August, adding it would not raise more in 2021.
Some toymakers say they’ve manager to skirt past the logistical bottlenecks. For example, Mattel, the maker of Barbie, Hot Wheels cars and Fisher Price toys, recently raised its 2021 sales forecast, saying it was employing a number of strategies including pulling forward production and contracting more ocean freight capacity to ring in a strong holiday season. But the company also said it would roll out price increases in the fourth quarter of this year.
In Toronto, Jill Rochon, owner of the independent toy store Jill and The Beanstalk says distributors have been warning throughout the summer of quickly dwindling stock and pressing retailers to place their orders early.
“It’s been very difficult,” she says.
The shortages seem random and unpredictable, she says, ranging from childrens’ tattoos and hair chalk, through toy barns and trains, to certain types of paint.
“It’s just been odd items that you never would have anticipated that are not coming in,” she says. But popular brands, in general, are becoming harder to find, she adds.
Electronics
The global semiconductor shortage continues to rattle the production lines of anything from gaming consoles, laptops and tablets to electric toothbrushes and smart thermostats.
Supply chain woes cost Apple $6 billion in sales during the company’s fourth fiscal quarter, which missed Wall Street expectations, the company said in its latest earnings report. And Chief Executive Tim Cook has warned the impact will be even worse on holiday sales.
“We’re doing everything we can do to get more (chips) and also everything we can do operationally to make sure we’re moving just as fast as possible,” Cook said.
Worldwide, semiconductor supply chains are struggling to keep up with a spike in the demand that started early on the pandemic, when millions of consumers stuck at home turned to electronics for both entertainment as well as school- and work-related needs, says Shawn DuBravac, chief economist at IPC, an electronics manufacturing trade association.
“We closed schools globally and moved children to remote schools, and in those instances, we bought them laptops, … tablets and other electronics,” he says. “We built our home offices with monitors and and microphones and cameras and other things like that. And so in the developed world, you saw generally a large increase in spending on durable goods really from the very beginning of the pandemic.”
Demand for durable goods is up a whopping 25 per cent in North America compared to the pre-pandemic period, he says.
But many electronics makers are now struggling with a variety of delays that go beyond chips, DuBravac adds. A common problem is what he calls “spot shortages.”
“You might have a manufacturer that has all of the parts they need to build a product, except for one. So they’re waiting on just a single component, and they can’t complete that product until they get that component. So everything kind of grinds to a halt,” he says.
Christmas trees and decor
Decking the halls may also be a challenge this year. The supply of artificial trees is expected to be between 20 to 25 per cent lower in the U.S. due to delays from China, according to CNN, with Christmas decorations and ornaments similarly affected.
If you’re thinking of buying a real Christmas tree, on the other hand, prepare for competition.
The Canadian Christmas Trees Association doesn’t expect domestic supply chain issues – such as Canada’s shortage of truckers – to significantly impact its ability to get trees from farms to resellers, but the organization does expect another season similar to last year, when record demand made it hard for many shoppers to get their hands on a natural tree.
“I believe we are going to have similar issues due to demand as we had last year,” executive director Shirley Brennan said via email.
Should you wait for Black Friday?
If you’re used to doing the bulk of your holiday shopping on Black Friday, you may want to reconsider this year.
That, though, doesn’t necessarily mean giving up on deals. In an effort to nudge consumers into buying earlier, some retailers are dishing up discounts much earlier than usual.
That notably includes Amazon, which said it has been rolling out “Black Friday-worthy deals” since the beginning of October on both sides of the border.
Walmart Canada said it plans a number of online and in-store Black Friday events during the month of November.
“Customers should watch for our advertising starting soon,” a spokesperson for the company said via email.
However, the company added supply chain constraints aren’t as severe in Canada as they are in the U.S.
“By buying earlier and accounting for extra lead time to move goods, we will be well-positioned for the season,” it said.
Strategies to check off your gift list anyways
Working through your gift list may require a little creativity this year. Here are some ideas to circumvent the supply chain issues.
Buy early
Buying early may be especially important if you have little ones at home who can be very particular about brands and toys. If you’re dreading having to come up with stories about Santa running out of containers or elves being stuck at ports, this may be your best bet.
Buy pre-owned or refurbished
Whether you’re flexible or intent on finding specific items, another option is turning to the pre-owned and refurbished market on buy-and-sell sites like Facebook Marketplace, Kijiji or eBay.
EBay has seen double-digit growth in multiple categories since the start of the pandemic, according to Robert Bigler, general manager of eBay Canada.
While not all of that growth is linked to the supply-chain problem, customers have been flocking to the site in search of goods that have been hit by widespread shortages, like electronics and sneakers.
Whether you’re buying new or pre-owned, “eBay is really built for scarcity,” he says.
The site, he adds, is powered by millions of small businesses and entrepreneurs who have proven very adept at sourcing scarce and hard-to-find items, he adds.
When it comes to electronics and small kitchen appliances, the company also has a program for refurbished customers returns. Certified refurbished products are in like-new conditions, come with a two-year warranty and sell for up to 50 per cent off the original price, according to the company.
Buy local
Buying local can be another strategy to avoid supply-chain headaches. Canadian-made toys, for example, have mostly remained easy to source, says Rochon of Jill and The Beanstalk.
“That’s a way that people can turn to support smaller businesses,” she says.
Buy gift cards and experiences
A third workaround is to give your loved ones gift cards they can spend on exactly what they want whenever it’s back in stock. You may also want to skew your list away from products and toward experiences.
While Canadians’ ability to travel and attend concerts, movie theatres and other amenities may be limited due to COVID-19 restrictions, those will eventually be a thing of the past. Many small businesses are also offering a range of virtual experiences such as evening cocktail and cooking classes delivered via Zoom.
As Restaurants Canada, an industry association, previously told Global News, gift cards to restaurants, in particular, can be a way to support your favourite local eateries through the tough winter months.
Comments