It seems like holiday promotions start earlier every year. This year, it’s actually a necessity. Why? Shipping delays and supply chain woes. As Q4 draws nearer, the ongoing pandemic is causing global supply chain delays and clogging up shipping ports. Savvy marketers and retailers are pushing the season in October to hopefully mitigate the effects of low inventory, labor shortages, and delayed shipping.
Holiday forecasts have predicted a sharp jump in year-over-year spending. Sales in November and December are expected to grow 7% compared with a year ago, meaning that families are eager to have normal celebrations after nearly two years of pandemic restrictions. However we might yearn for a return to normalcy, the theme of holiday shopping in the midst of a pandemic is: “buy early while gift-worthy goods are still available.” Worldwide supply chain bottlenecks and shipping delays mean the closer to the December holidays the calendar gets, the less likely some store shelves may be filled with what consumers want most. Experts don’t expect the jams to ease until long after gifts are opened.
Many small retailers anticipated this and placed orders early. However, items are taking longer to arrive and delivery personnel is stretched thin. Even large retailers are feeling the effects. Before the pandemic, it took about 40 days to move a pair of Nike sneakers from Asia to North America. With container shortages, port and rail congestion, and labor shortages, shipping shoes now takes up to 80 days — roughly two times normal. These factors threaten to spoil the holiday season for families that don’t shop soon enough. Many phases of the manufacturing and delivery processes are taking longer than normal and consumers can expect packages to take more time to get to their doorsteps as delivery carriers work through their own bottlenecks.
What does this mean for consumers and retailers? If you’re a consumer planning to purchase holiday gifts, start shopping now. Toys, games, and children’s activities have been especially hard-hit by the global shipping crisis. Toymakers have reported millions of dollars worth of products being stuck in factories or in containers on ships, unable to get to where they need to be because of shortages and delays in the supply chain network. To avoid a Christmas morning meltdown, we suggest you place those orders as soon as possible. If you’re a retailer, increase your holiday marketing budgets to reach a large audience with early holiday promotions, and lean into the scarcity model to encourage customers to buy early. You can also try to get ahead of possible shortages by broadening a delivery window to leave buffer time or having substitute items to suggest if popular ones are unavailable.
We’re here to discuss your Q4 marketing strategy and help maximize your holiday spend. Give us a call at 781-247-0730 or send an email to ed@mittcom.com
Sources: CNBC, MSN