Dubai: As online shopping is expected to reach record highs this holiday season, shipping carriers as a result will experience larger-than-usual volume this holiday season. But what does that mean to an average online shopper like us?
Retailers and shopping experts have been flagging that the increased volume may possibly lead to shipping delays worldwide, which could result in online shoppers receiving their packages later than anticipated.
A repeat of last year?
However, this isn’t news. This is the one parallel that can be drawn to 2020 when it comes to holiday shopping this year.
Like last year, a surge in demand expectedly lowers inventory levels of predominantly high-demand products, forcing them to be sold out very quickly particularly during the year-end.
But what kind of delays can we expect? And how can we prepare beforehand? Does that mean holiday shoppers need to plan ahead of time and start shopping early? To put it simply, yes.
The earlier the better. This is why experts and financial planners further recommend that people make informed holiday shopping decisions by planning and budgeting for their shopping as early as possible this year.
So, if you shop online earlier than usual this holiday season, this will ensure that you and your loved ones receive your respective holiday-related goodies on time.
Timelines of holiday shopping events are being moved ahead
So retailers looking to capture pent-up demand are adapting by shifting the timing of holiday-related shopping seasons and year-end sale offers.
Retailers including Amazon and several others have started to offer holiday promotions even earlier than normal to get ahead of the lack of inventory and to ease consumer anxiety. That may yet lead to an accelerated timeline for holiday gift buying.
In the UAE, whether it is Sharaf DG or Eros Group or UAE telcos Etisalat and du, the offers on the latest smartphones are already popping up everywhere.
Several retailers worldwide hopped onto last year's delayed Amazon Prime Day in October, which resulted in jump-starting and elongating the buying season.
As logic of economic principals dictate, to combat higher demand retailers generally raise prices of products and these higher costs are often passed along to consumers as higher prices.
Marginal price spike
But historically speaking, data shows that prices hikes – albeit marginal – has not kept consumers from buying after being convinced by holiday deals. The latest global retail sales numbers show consumers are spending at a much faster pace than expected, up over 10 per cent in September.
While holiday delays are nothing new, the reality is it’s expected to be seen across industries. Most years, some trendy toy or gaming console becomes the hot, hard-to-find item when manufacturers and retailers misjudge demand.
Moreover, multiple retail industry experts evaluate how the potential price hikes, and the potential for delays, should only encourage people to start shopping as early as possible.
Spending rises on new back-to-school, back-to-work trends
Current statistics show that back-to-school and back-to-work trends drove a higher level of transactions, but what about early holiday shopping?
This holiday season “continues the early shopping trend, with the added layer of inventory concerns motivating many shoppers to grab what they want when they see it, instead of waiting for better deals later in the season,” analysis by US-based market researcher The NPD Group noted in its annual outlook.
Data collected globally last year found that holiday shoppers largely held back, with 81 per cent of respondents to a survey it conducted about Amazon Prime Day saying they waited on major holiday shopping, and the purchases they did make were for themselves.
So what are big retailers doing to cope with the surge in demand? Big retailers have revealed that they have stocked up earlier than usual this year as the world tried to emerge from the pandemic. Global retailers flagged more inventory at the end of June than it did in 2020, at the height of store closures.
For its part, retail giant Amazon said it's "on track" to hire 125,000 more people in warehouse and logistics jobs as it takes on the potential year-end surge in demand.
What does all this mean to the average shopper, particularly online shoppers?
What all this means the closer to the December holidays the calendar gets, the less likely shoppers will get their products on time. Experts don't expect the jams to ease until early 2022, long after gifts are opened and the books are closed on retail's traditionally busiest time.
"Major retailers are expecting a strong holiday shopping season but have warned shoppers of longer shipping times," economists at banking heavyweight Morgan Stanley said in a recent note.
Still, shoppers worldwide are expected to spend big this year, even as prices for items from toys to clothes are forecast to rise, according to a report from US-based retail advisory firm Coresight Research.
Shoppers will likely spend as much as 10 per cent more this year, according to Coresight's report, which also added that if shoppers run up against demand surges, many will likely shift to other options like gift cards.
Panic buying can be destructive to budgets, so how to prepare beforehand?
Panic buying early ahead of the holiday shopping season can be just as destructive to your budget as waiting until the last minute.
Consider drafting a holiday budget now that incorporates all your expected costs, including gifts, decorations, entertaining and travel, financial planners reiterate.
Write down the amount you intend to spend, then make adjustments to keep your spending in line with your means, to avoid going into debt, planners add.
So, if you combine rising costs, low supply and shoppers’ anxiety about finding the right gifts, and the holiday season could quickly become a budgeting nightmare.
Does that mean holiday shoppers need to plan ahead of time and start shopping early?
However, financial planners recommend that by starting early, you can minimise the financial impact that the holiday shopping season will have on your wallet.
Your biggest advantage to saving [money] this holiday season, experts remind, will be time. The more time you have to shop, this will allow you to save money, gain the assurance in getting the gifts you want, and avoid the hassle and stress of scrambling to buy gifts at the last minute.
Creating a budget can be as simple as mapping out your holiday expenses, either using a pen and paper, creating an Excel spreadsheet or downloading a budgeting app.
Bottom line: Start sooner, make a plan, make use of options available
Whichever method works for you, it’s vital to not start 2022 in deeper debt than you anticipated. And, if saving money is of high priority to you, you can also consider using a cash-back credit card for immediate savings.
In addition to planning ahead and creating a budget, you can also begin to strategise which credit cards will be best for your spending patterns. Banks continue to launch huge credit card welcome offers which can be a great way to earn a boatload of points or cash back for your holiday shopping expenses.
Numerous experts view that this holiday season is going to be tough for many shoppers, especially for those who wait until the last minute. So, because of higher chances of delays in getting your goodies on time, your safest bet to get the items you want, and for the best price, is to get started early.
Also, if you can’t pay all of it upfront or don’t want to use their credit cards, there are still options they can select from. They could split their payments all the way up to 24 months if they choose to pick the latest iPhone.
For example, an iPhone 13 Pro 128GB can be had for Dh190 for a 24-month payment plan, while for the all-new Samsung Galaxy Z Fold 3, the plan can be stretched to 36 months at Dh201 a month from Etisalat.
More retailers now allow the ‘buy now pay later’ (BNPL) option, whereby shoppers do not have to pay any interest on their purchase and the payments to be split over 10-12 months. That factor – of not having to shell out interest payments over and above the gadget price – is what’s turning shoppers to BNPL.
It is because consumers face potential delays, retailers are bringing forward all those promotions and attractive payment plans. If that helps convince shoppers here to make those orders sooner rather than wait until the holiday shopping offers, that will be a win in itself.
