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- Online "out-of-stock" warnings are up 172% from pre-pandemic levels, Adobe said in a Wednesday report.
- The widespread shortages come as ports and companies struggle to untangle a global supply-chain mess.
- Online shopping will still grow, Adobe said, but decade-high inflation means deals will be hard to find.
It's already too late to order many products online in time for the holiday season. In-demand items are already out of stock, and the global supply-chain nightmare signals they won't be returning for a good while.
Out-of-stock warnings are up 172% from January 2020, Adobe said in its annual holiday shopping forecast published Wednesday. That's nearly triple the pre-pandemic norm. Such warnings are also up 360% from January 2019.
Shortages are the most widespread for clothing, with the category surpassing 17 other product groups with the most out-of-stock warnings. Sporting goods, baby products, electronics, and pet products followed, according to Adobe.
The jump in out-of-stock messages caps a month of supply-chain disarray. The energy crunch in China forced factory blackouts and worsened already massive order backlogs. Once goods reached cargo ships, crowded ports made delays even longer. The shipping mess has led the White House to push companies to operate 24/7 to process orders and unload cargo vessels.
Americans bring the spending, but stores bring inflation
The increase also comes ahead of a critical juncture for the economic recovery. Americans' spending is key to the rebound, as it counts for roughly 70% of economic activity.
Likewise, the holiday season is critical for consumer spending. Americans collectively spend hundreds of billions of dollars in the final months of the year. In pre-crisis times, weaker-than-expected spending would fuel concerns of faltering economic growth. Today, disappointing holiday sales could derail the entire economic recovery.
Early forecasts suggest there's little to worry about in that department. The shift to online shopping will drive a record $207 billion in e-commerce sales this holiday season, Adobe said. That's up 10% from spending in 2020.
But with stronger spending comes stronger inflation. Price growth is already stuck at decade-high levels, and as Americans' spending ramps up, demand will further overwhelm supply. Shoppers will pay 9% more during Cyber Week - the period between Thanksgiving and Cyber Monday - compared to the same time last year, according to Adobe.
Those hoping for discounts to counter inflation will be disappointed, the company added. Markdowns will range from 5% to 25% this holiday season, down from the historical average of a 10% to 30% range.
Put simply, the value Americans typically enjoy during the holiday season won't be around this year. Online prices were historically 5% lower year-over-year before seasonal discounts hit, Adobe said. This year's surging inflation will instead place prices about 3.3% higher. Instead of a $50 discount on $1,000 worth of shopping, Americans will have to pay $30 more, the company added.
Still, it's likely the upcoming holiday season will be the worst one for a while. There are signs the US is "past the peak pinch" in supply chains, Jefferies economists said in a recent note. The team expects the global supply chain to show "significant improvement" by the second half of 2022. October likely marked the worst of the shipping crisis, and supply will pick up into November as the holiday shipping window closes, the bank added.
"Between shipping costs, labor shortages, raw materials, and input availability, the global supply chain has been stretched remarkably thin," Jefferies said. "We may be already witnessing the worst of it."
source https://www.businessinsider.com/holiday-shopping-out-of-stock-warnings-supply-shortages-adobe-spending-2021-10