Why September is the new holiday shopping season
After many disruptions last year, the Delta variant further disrupted the global movement of goods. Bergstrom’s suppliers are late and charge huge fees on their shipments. Glass and paper shortages are delaying deliveries.
She is far from alone.
Eighteen months after the start of the pandemic, supply chain problems continue to plague retailers across the country, leaving store owners scrambling to determine what the next few months will hold. The lingering problems have been compounded by the rise of Delta, ongoing labor shortages and a downward shift in consumer confidence, which hit a six-month low last month. Global supply systems – from factories to ports to freight carriers – have been under such pressure for so long that experts say it could wreak havoc during the holiday shopping season, which accounts for the majority. sales from many retailers.
Bergstrom is spending tens of thousands of dollars on merchandise for the holiday shopping season, but isn’t sure what will happen in time. So last month it asked all of its manufacturers to ship the rest of the year’s orders as soon as possible rather than over the next few months.
“Send me everything,” she told them. “I want it now.”
In August, she started highlighting glittering trees, snow globes and ornaments in her store. In the Before Times, she wouldn’t have flipped the vacation switch until October.
“The future is uncertain,” she said. Better sell the snow globes now, she reasoned, who knows what might happen next?
Consumers, who before COVID-19 could remain blissfully ignorant of how goods were produced and shipped, have now grown accustomed to stockouts or delivery delays. But the supply chain issues that started with a rush for hand sanitizer and toilet paper in March 2020 have actually become more difficult as the pandemic continues.
“The big picture is you find that the continued demand exceeds the supply of everything,” said Jon Gold, vice president of supply chain and customs policy for the National Retail Federation. “The whole system is put to the test and there isn’t a single part that will fix it. “
At the start of the pandemic, the problem was getting products through closed or understaffed global ports. But the goods had at least been produced. Today, the supply chain is damaged at every link, Gold said, as demand has recovered. Shipping volumes were so high in August, he said, that he expects them to will establish a record this year.
But disturbances still abound. COVID has ravaged the workforce in some of the world’s manufacturing hubs; India has imposed a lockdown during its push, and parts of China and Vietnam are currently facing continued waves of the virus as well. Unexpected climatic events like Texas deep frost in February blocked the assembly of finished products and components needed to manufacture them, such as the foam on sofas or computer chips in cars.
Shipping has also been hampered by congestion, making it nearly impossible for businesses to secure empty containers. Getting a container into the port is also increasingly difficult: This week, a record 56 ships were stranded waiting in front of the huge ports of Los Angeles and Long Beach. It has become so frustrating – and expensive – that many companies are now trying to transport cargo to the United States, Gold said, as the price of air freight has become more competitive with ocean-going vessels. But because fewer planes are flying, it’s not an option for everyone.
And when a shipping container comes ashore, there are more challenges. Too few longshoremen to unload the goods. Not enough storage space to store them. Trucking companies cannot find drivers, making it difficult to distribute goods across the country and to distribution centers and stores. And once the goods arrive, retailers struggle to keep their staff.
Pair all of these issues with the fact that August and September are the busiest shipping months of the year – usually when all the products that will be sold during the holiday season are in transit – and the chain of shipping supply is in chaos.
“It’s kind of like a person who’s been sick with multiple illnesses, and your immune system hasn’t come back and then boom, you’re hit with something else,” said Nada Sanders, a chain management professor. supply at Northeastern University.
The difference this year is that unlike 2020 buyers were back, raising morale, revenues and expectations. Retailers like Alison Barnard O’Brien, owner of Injeanius, a denim store in the Seaport, have seen a huge spate of spending this spring.
“My business has been open for 16 years and I probably had one of my best months last May,” she said. “After the vaccination, everyone was like, ‘I just need to go out and I need a new wardrobe.’ “
But now the styles she ordered six months ago are not showing. The price of cotton is increasing. It was more difficult to restock her hottest brands – like Mother Denim or AGOLDE – so she supplemented with newer, lesser-known labels. And as the peak shopping season approaches, she changes her approach to sales.
“With customers, we are not a hard sell. Usually you buy it because you like it, you want it, it looks good on you, ”she said. “But now I tell people, ‘If you really like her, you can’t really wait. I don’t know if I can get you another one. “
Indeed, as retailers try to figure out how to stock up for the holidays, they try to determine if they can secure the goods.
“We know there are going to be shortages of key products,” said Keith Jelinek, managing director of business consulting firm Berkeley Research Group, where he helps companies manage their inventory. “Not everything everyone ordered will arrive on time.”
He advised his larger retail clients to change their strategies, keeping things in warehouses instead of shipping everything to stores, so they could later get the products to where the sales are greatest. And he suggests fewer discounts – maybe a 30% sale on that speaker system instead of 40% – as a way to offset rising shipping costs. This holiday season, he added, all stores should encourage shoppers to start early or buy gift cards in order to manage customer expectations.
It was the not-so-subtle message sent just before Labor Day weekend by Talbots CEO Lizanne Kindler, who wrote a word of warning to her clients: The production of the brand’s fall and winter collections was late, so they should be patient for new blazers and sweater dresses to hit stores.
Like many retailers, “we are experiencing delays in our supply chain due to the continuing impact of the pandemic,” Kindler wrote. “We expect this to continue over the next few months to come. “
And there was a much more direct note from Chris Butler, the general manager of National Tree Co., a seller of artificial trees and spruces. Consumers “are hoping to buy a Christmas tree and other decorations this holiday season”, better do so before Thanksgiving or risking paying through the nose or having nothing at all, ”he said in a press release.
Jon Hurst, president of the Retailers Association of Massachusetts, said retailers of all shapes and sizes are feeling the pressure, making this much-needed gift all the more difficult to find as the holidays approach.
“We all know that inventory levels across all types of stores have been inconsistent and often low throughout the pandemic,” he wrote in an email. “You can see that some might be running out of options, especially as we get closer to the holidays.”
The best way to avoid the problem? Start shopping now.