We are approaching downhill and without brakes towards the Christmas campaign, or what is the same: lights, decoration to the top of brilli brilli and fake snow … But, also, synonymous with crowds, long queues in the checkout area and products exhausted. This year, in addition, it will be double due to shortages and shortages of various products around the world, such as paper, construction material, microchips … This is the forecast to be expected.
Why will Christmas shopping be difficult this year?
According to experts, the situation of scarcity and shortage that we are currently experiencing is due to the fact that we have not yet recovered from the economic crisis of the coronavirus. In March 2020, shortly after the WHO declared the pandemic, we already published in Jared that the closure of factories in China could end up translating into a reduction in stock of the brands that would affect the winter collections.
Finally, what has happened, as explained by the British television station BBC, is that the restrictions and port closures caused by the new strains of Covid have made hundreds of thousands of containers in the West have not been able to return to the Asian continent after delivering your goods. These delays in deliveries reduce the availability of containers, which increases their price and increases that of transport. Unfortunately, this situation is not expected to improve until mid-January next year, so Christmas shopping can get tricky.
In addition, the problems of containers and maritime transport should be added a crisis of the energy necessary for the production of any product. And is that the Light prices are so high that, many times, companies are not compensated to manufacture. In fact, China is currently experiencing the worst energy shortage in recent history due to rising coal prices, rising demand for electricity and strict environmental measures to reduce carbon emissions.
While the rest of the world accelerates more and more in the demand for products, the Asian giant continues with its protectionist policies by stockpiling raw materials and electronic components in order to supply itself. Large manufacturing industries are the main affected.
In total, 44% of the country’s industries are affected and, above all, aluminum smelters and textile producers, who have already been ordered to reduce their activities and even cut them completely. The factories that supply multinationals like Apple and Tesla are among those that have been affected, putting supply chains at risk in the middle of the electronics peak season.
Ikea has been another of the firms in which customers have already been able to notice the consequences of the situation described above. So much so that the Swedish furniture store has recognized “supply chain disruptions” and is known to has started to charter its own vessels and buy its containers to overcome difficulties in maritime transport.
In addition, they have confirmed Jared, to be “exploring opportunities to increase the supply of products from Europe “and be” focused “, on the one hand, on ensuring availability in its best-selling products and, on the other,” on guarantee the most relevant products of the season or special moments in the year, both in physical stores and in online purchases “.
What products are most at risk of becoming scarce and expensive this Christmas?
The OCU has warned that products such as milk, eggs or meats have already experienced an increase of over 5% in mid-September. So, buy a kilo of chicken it now costs one euro more than a few weeks ago. Products such as sirloin, lamb or entrecote have risen to three euros.
An atypical Christmas is coming when it comes to alcohol, for months, distributors have been registering a lack of well-known brands such as Absolut, Beefeater, Jameson or Seagram’s. Although it has also splashed wine and champagne. Manufacturers are having a hard time bottling because They are starting to run out of materials such as glass, corks and labels.
With the return to “normality”, demand has skyrocketed and there has been no forecast that this could happen since during the pandemic the factories lowered their production level or stopped it completely. Many of these packages are made in China and they are using them there for their own consumption, which means that it is not for the West.
On the other hand, the semiconductor crisis is affecting industries of all kinds but, above all, it has caused the lack of supply of parts in the automotive sector. In addition, metals such as copper and aluminum has risen more than 50% and nickel has risen by 40%. This has resulted in a shortage of components in the market for lbicycles and non-motorized two-wheelers.
It is known that the lower production of these chips will affect this Christmas season because they are also used in toys and electronic devices that are part of what is called the Internet of things. Even Toshiba has claimed that the microchip shortage will last until 2023.
The year of experiences
Based on the latest Salesforce predictions, this Christmas consumers will spend more, but buy fewer products. This is due to the fact that prices will rise by 20%, due to the crisis suffered by the supply chain at a global level.
Enrique Mazón, Regional Vice President Commerce of Cloud Spain, points out in this regard that “Everything suggests that consumers around the world will advance their Christmas purchases, due to the delays in last year’s shipments.”
One of the biggest challenges last year was delays in customer deliveries. While the concern persists this year, it is much less widespread despite everything. At least as Salesforce envisions with a 94% decrease in orders with risk of delay (ie 40 million packages worldwide compared to 700 million last year). Mind you, this will many buyers choose to buy early this Christmas.
Although the purchase channels will continue to be multiple, customers are beginning to return to physical spaces to purchase consumer products. What’s more, bet on Spanish manufacturers it can be a very effective way to get the products we need without problems.
It will also bet on giving experiences. Among them, three are outlined as the most demanded: adventure, for consumers interested in goods and services in the open air and action; the social, for those seeking emotional connection; and, finally, luxury with all the exclusive experiences that it entails.
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