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Will the 2021 Holiday Shopping Season Disappoint You?

By now you have heard about the biggest concern for the all-important Holiday shopping season, and it has makers and sellers of everything in panic mode. The holiday shopping opportunity is paramount for the survival and sustainability of America’s retailers. It’s a time when most businesses cross the profitability line each year. A dismal holiday selling season is often the death-nail to hundreds of businesses each January. After two very challenging, “Pandemic” affected selling seasons, a National Retail Federation and Prosper Insights & Analytics survey is indicating that 90% of adults said they plan to celebrate the 2021 holiday season, which includes Christmas, Hanukkah and Kwanzaa. The predictions better the actual experience in 2020 and has retailers hopefully anticipating some recovery from the impact of COVID-19.

According to the survey, each consumer will spend nearly $650 for gifts, $350 on non-gift items and approximately $231 on food, candy, decorations and cards. The trends have most retailers feeling optimistic, but not all are positive for consumers or brands’ bottom lines. Merchandise costs are on the rise due to increases in manufacturing, shipping and labor. Salesforce is predicting that retailers will pay an additional $223 billion in increased costs for stocking the shelves this holiday season leaving some to cover the increased prices with lower profit margins or passing them on in form of higher prices to consumers. To make matters even more concerning, supply chain disruptions have 47 percent of consumers fearful that they will not be able to purchase the most popular items expected to be found under the tree Christmas morning. What was shaping up to be a redeeming holiday season to embattled retailers may turn into a real “Humbug” experience.

Perhaps the only more stressing reality for marketers than not having a substantial stream of customers is to have a store full of consumers eager to spend but not having items to sell. It is a dilemma being realized by thousands of mainly small businesses across the country. Larger, big box retailers are less-affected due to a more powerful influence on the supply chain, but are also showing signs of stress brought on by sparse shelves. “The big picture is that you’re seeing ongoing demand outpacing supply of everything,” said Jon Gold, vice president of supply chain and customs policy for the National Retail Federation. “The entire system is strained and there’s no one piece that’s going to fix it.” The issue is quickly depressing consumers who were beginning to respond with lifting spirits and increasing hopes of a sustained recovery.  “It’s very much like a person that has been sick with multiple illnesses, and your immune system hasn’t come back and then boom you’re hit by something else,” said Nada Sanders, a professor of supply chain management at Northeastern University.

The start of the holiday buying season has been moving forward on the calendar for the past few years. Last year consumers began to make purchases for gifts and decorations early in the month of November, just after Halloween. In 2021, more consumers began buying for the Holidays just after Labor Day in order to be sure they would receive popular items in time for all the celebrations. Black Friday, long noted as the positive beginning of holiday shopping, may now become known as the black day when consumers realize disappointment over an inability to capture a child’s favorite toy. “Shop early” is the common mantra now being heard across digital social media channels as the shopping season continues to advance earlier. Michael Scheschuk, Jungle Scout’s Chief Marketing Officer says, “The holiday season continues to shift earlier and earlier on the calendar. Now that almost a third of shoppers are planning to start their purchases as early as October, retailers and online merchants will continue moving special deals forward on the calendar.”

Some of the most intensely sought-after toys that are expected to be difficult to find are WowWee Got2Glow Fairy Finder, My Squishy Little Golden Dumpling, TeeTurtle Reversible Octopus, The Big Dig ride-on excavator and all things L.O.L. The line of L.O.L. dolls has dominated little girls’ “Santa Lists” since last year and shows no sign of slipping out of favor this season. The O.M.G Movie Magic Studios totals more than 70 unboxing experiences for youngsters, including 12 dolls. The box even transforms into a movie set. As of this writing it is still available for $99.00 but demand is beginning to push-up the price for future purchasers.

Educational toys like the National Geographic Mega Science Series Earth Science Kit and the Osmo Math Wizard & the Magical Workshop are interactive and learning fun for all ages. Learning toys may be a safe play for parents and grandparents when some more popular toys become extinct. If Hot Wheels City Ultimate Octo Care Wash or the Lego Elf Club House is on the get-list, sorry they’re out of stock at this early date. The good news? At $150, the Disney Princess Ultimate Celebration Castle is available, at least for now. The Magic Mixies Cauldron is already sold out at Amazon, Target, and Walmart but can be found on eBay for twice the original price, proof that there are those who can prosper from a distribution Grinch. For many parents not wanting to disappoint this year, deeper pockets may be in order.

Some surprising winners of this battle may be independent, brick and mortar businesses who had the insight to buy-in inventory early. Consumers have been trending back to small retailers since the pandemic began its slow, deliberate retreat, and many consumers may just discover an affordable solution to the challenges of gift buying right on main street.

The lesson for the masses that predicted a quick and responsive return to normalcy after the pandemic? Any return to normal will present as a new and unexperienced normal that may take an abundance of patient endurance for months or even years to come. Happy Holidays!