How to Ensure Your Holiday Gifts Actually Arrive This Year
Supply chain issues are causing a lag. You still have time to shop for the kids — but barely.
In most years, parents don’t give a thought to holiday shopping before Halloween. But 2021 is not most years. With September barely over, there’s already talk of toys being in short supply. Yes, holiday shopping in 2021 is going to be complicated for parents of children who don’t know what they want yet. For the selective kids — who must have this year’s “it” toys — it’s going to be an absolute nightmare.
Blame COVID. This holiday season, toys and other consumer goods are expected to be harder to find because of the disruption to the global supply chain.
There’s the problem with the raw materials because of extreme weather. Rob Handfield, professor of supply chain management at North Carolina State University and director of the Supply Chain Resource Cooperative, said that weather emergencies have reduced the availability of the fundamental petrochemical materials — plastic resins that have petrochemical feedstocks — used to make most toys. “A lot of toys have resins,” Handfield says. “Those are in short supply because of Hurricane Ida and the freeze back in Texas, which shut down a lot of the petrochemical plants and they haven’t really recovered yet.”
Then there’s staffing. You need people to pack, ship, and deliver the goods. But when more than 235 million people are sick, and everyone else is worried about getting sick or second-guessing the minimum wage work that could be putting their lives at risk, you have fewer people available to help. Just one example: A terminal in China shut down after discovering the delta variant amongst workers, halting a shipment of toys from Shanghai to New York, jacking up the prices of those products by four times. Furthermore, many manufacturing hub countries like Vietnam have low vaccination rates. At home, the delta variant has kept dockworkers away from ports on the East and West Coast while a shortage of drivers stops trucks from hauling goods.
The fallout of all this for parents? Toys are going to be more expensive and harder to find from here until the holidays. But don’t despair just yet! There are ways around it. Here’s what the experts advise, starting with you getting Santa’s list together, right now. What are you waiting for? It’s holiday shopping time!
Rule 1. Early Planning Isn’t Just Practical This Year — It’s Essential
While he was half-joking when he suggested to the AFP news agency that parents order Christmas presents now unless they want to gift a photo of something that’ll arrive in February, Scott Price, the international president for UPS, isn’t that far off. Parents should be shopping now to lock in toys that might not be available later this year. According to a recent CreditCards.com survey, 62% of people who responded will make holiday purchases online; more than 3 out of 5 shoppers. Greater than half the shoppers plan to start before Halloween. Competition is going to be fierce this year.
Rule 2. A Toy In Hand Is Worth Two On The List
Fordham University professor Matthew Hockenberry, who has explored logistics and supply chains for Supply Studies and in academic publications including his new book Assembly Codes: Logistics of Media Production, says some sought-after toys might not be available at all, especially if you shop at the last minute for a specific, must-have item. “It’s not like there aren’t going to be stuffed animals,” Hockenberry says. “But a particular stuffed animal, there’s no guarantee that it will be in stock or be replenished between now and the holidays. That Christmas Eve shopping, if you had your heart set on a particular object, that’s going to be difficult.” If you see something in a store or online today, don’t assume it will be there next week or next month.
Rule 3. Everyone In The Supply Train Is Crunched (See Rule #2)
Supply chain pain looms for just about every toymaker. Neil Saunders, managing director and retail analyst at the research firm GlobalData, says toy brands of all sizes will encounter problems this holiday season. “No one is immune from the global supply chain crunch and issues like manufacturing capacity constraints and shipping problems will affect everyone,” Saunders says. “That said, the big players have more financial muscle and operational clout to try and mitigate the problems.” For example, larger toy companies can afford the quickly rising costs of shipping goods from manufacturing plants in Asia across the Pacific to America.
With their greater revenue and resources, international toy giants like Mattel, Hasbro, and Lego can plan better and spend more to get toys to households in time for the holidays. Hasbro CEO Brian Goldner told shareholders the company had sufficient supply during a July earnings call, for example.
Rule 4. Choose Plush Over Plastic, Solid Over Semiconductor
Handfield noted that semiconductor makers, particularly in Taiwan and Korea, where most of these electronics are made, slowed down production during the pandemic. “There’s a shortage of semiconductors and a lot of toys have chips in them today,” Handfield says, adding that while semiconductor manufacturing is ramping up, it’s not an instant process. Due to semiconductor and plastic shortages, parents may be wise to research the companies behind their kids’ favorite toys. This might not be the year for a hot new video game, robot, or tech-forward toy.
Rule 5. Gifts This Year Will Cost More
The Washington Post reports that the median cost of shipping a standard container from China to the West Coast of the United States hit a record $20,586 in September, almost twice what it cost in July, which was twice what it cost scant months before in January. “There’s been a lot of delays in the ports and a shortage of containers,” Handfield says. “What used to take six weeks is taking 12 to 20 weeks to get containers across the ocean now.” All that translates to toys will be more expensive across the board due to rising costs of making, packaging, shipping, and warehousing toys because of labor shortages caused by the pandemic.
Rule 6. Support The Small Stores — If You Can
Costco and other large retailers like Walmart and Target have been buying or renting containers and setting up their own delivery routes to try to mitigate shipping problems. “But that’s something that is not open really to a smaller boutique company,” Hockenberry says. He noted that small-batch toymakers who sell their creations at pop-up craft fairs and other informal marketplaces should be reliable, depending on what materials they use. “I would say that even for artisanal productions, you’re going to see maybe some costs go up,” he says. “Material costs just in general are unpredictable, but that is a much safer kind of shopping list in some sense.”
Saunders says it is easier for larger toy companies to pay higher rates for shipping or put more pressure on manufacturers. But smaller toy companies may have structural advantages if their toymaking facilities are closer to home. “Some smaller, domestic players may also fare better if their manufacturing is done within the U.S.,” Saunders says. “This means they get to avoid the shipping constraints.”
So, should parents start shopping for the holidays now? “It would not be a bad idea,” Handfield says.