This time last year, Black Friday and Cyber Monday shopping were in peril due to ongoing supply chain issues. Nearing these major holiday shopping days for discount shoppers in 2022, is the outlook similarly dire? Fortunately, no. While inflation may elevate what people will pay for presents, shortages should be much less common this year thanks to a smoother supply chain environment. As you may recall, the holiday season of 2021 presented perhaps the height of supply chain stresses, with container ships full of holiday items waiting endlessly at backed up ports, capacity issues for truckload and intermodal transportation (as well as warehouses) once items made it to land and shortages of the people who made freight move. Now, the port backups are just about gone and capacity is readily (perhaps too) available - though there are still labor concerns. It also seems as if retailers and shippers learned lessons from last year's tough environment and got their holiday season merchandise going through supply chains sooner than usual to ensure availability. As a result, experts say most items should be in ample supply for Black Friday and Cyber Monday. In reality, retailers are facing the opposite problem this year: too much supply. So sales are happening not only on these touchstone shopping days, but well before. In fact, Black Friday and Cyber Monday-esque deals occur throughout November.
Does inflation affect Christmas?
Inflation currently sits just under 8%, meaning prices of just about everything are up heading into Christmas this year (though electronics are a notable exception). But the effects are more complicated than consumers simply spending more. Some economists say this holiday season may be the "last hurrah" for elevated consumer spending before people adjust how much they buy due to higher prices. Others suggest that while people won't stop shopping, they're likely to simply buy less than they would in a normal year - so the tree may have a little extra space under it come Christmas morning. Related to that whole buying less idea though, is retail inventory. As mentioned above, in correcting for last year's dearth of supply, some shippers and retailers practiced a ship early, ship often philosophy to ensure adequate stock for Black Friday, Cyber Monday and any other holiday shopping days this year. However, they weren't expecting inflation to rear its ugly head when making their 2022 inventory plans. Thus, discounts are still happening to entice consumers to keep up their buying so retailers and shippers aren't stuck with too much surplus and too little revenue after the season ends. Speaking of the ship early, ship often issue - it's part of the reason peak freight season hasn't materialized this year. Much of the holiday-related freight activity had already occurred ahead of the traditional peak, and combined with the inevitable correction from pandemic-related highs - shipping volume is down considerably this season.
Is the supply chain environment working for your business this holiday shopping season and beyond? Drop us a line and we'd be happy to help today - and long-term. For now, visit our Resources page for more on freight and logistics - and us. Or start with one of the links below: