Empty Shelves, Out-of-Stock Product and Fewer Discounts Will Define This Holiday Shopping Season

·2 min read

It’s gearing up to be a holiday season like no other.

With supply chain issues reaching a very fever pitch, Adobe data suggests that shoppers can expect a shopping experience marked by empty shelves and out-of-stock product online.

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According to Adobe’s annual holiday forecast report, out-of-stock messages are up 172% this year compared to the pre-pandemic period of Jan. 2020 and up 360% compared to Jan. of 2019. Apparel is the category with the highest amount of out-of-stock messages. Adobe predicts that the problem will worsen as the holidays near.

The issues are a by-product of unprecedented supply chain problems, resulting from a combination of materials shortages, factory closures abroad in China, Malaysia, and Vietnam, labor shortages, and congestion at crucial U.S. ports. These problems have put retailers and brands in danger of missing inventory targets for the holiday season.

As demand rises, Adobe predicts a wave of shortages throughout the rest of the year. The mismatched supply and demand will also promote an inflationary environment with little seasonal discounts during crucial sales weekends such as Memorial Day and Labor Day. However, discounts during Thanksgiving, Black Friday, and Cyber Monday will likely persist.

High freight and container costs have already sent some product prices to unprecedented highs. This upward pricing trend will translate to less saving and more spending for consumers overall. 68% of consumers expect higher prices this season and 11.5% do not plan to spend this holiday season, up from 4.9% in 2020. 65% of these non-spenders are from lower-income households.

Despite the fear of shortages, Adobe is predicting a season of record demand for e-commerce that will likely hit $207 billion spent online, which would mark the first time that the online retail holiday season crosses $200 billion.

Consumers are still concerned about the potential for shortages, according to Deloitte’s 36th annual Holiday Retail Survey, which polled 4,315 U.S. consumers and 30 retail executives ahead of the holiday season. According to the survey, 75% of consumers expressed concern about stock-outs, which has spurred them to complete shopping earlier than usual. 6 in 10 retail executives said they were concerned about not receiving holiday orders in time.

Consumers also largely plan to return to in-person shopping this Black Friday, according to KPMG’s consumer pulse survey for the holiday season of 2021. According to the survey of more than 1,000 consumers, 32% plan to shop in person on Black Friday this year, compared with 16% last year. Respondents also reported that they plan to attend more in-person holiday gatherings this year.

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