Friday marks the traditional start of the holiday shopping season. Of course, American retail is still feeling the effects of the lingering pandemic, supply chain issues, and more.
WOSU's Matthew Rand spoke with Terry Esper, Ohio State University associate professor of logistics, about how the holiday shopping season is shaping up.
Retail sales grew for the third straight month in October, jumping 1.7 percent, despite general unease about the economy. What are people spending their money on?
It's a great question. You know, one of the big messages that went out when we started to see this emerging supply chain crisis was that holiday shopping starts early this year. So I think what we're seeing is just the effects of a much more early shopper, I think we're seeing a much more proactive shopper relative to the holidays. And a lot of that, of course, is driven by the expectation that there might be shortages, and that we might have additional issues associated with the supply chain prices. So I think people are just spending a little earlier this year.
What sectors are doing well right now and which ones are suffering?
Well, I tell you what we're watching, particularly in terms of the sectors where we see big suffering. The technology space is a big one, we have heard for a long time that there are chip shortages and that those computer chip shortages are starting to have an effect on product availability of technology. So we're watching that. Apparel is another space where we're seeing some big problems. There were several reported COVID shutdowns in apparel manufacturing sites over in Asia, and so that is another space where we're watching. I think in terms of the areas where we do see some success, I would say it's maybe not necessarily be sectors as much as it is particular types of retailers. The real big retailers—the Walmarts, the Targets, the Home Depots—these are the retailers that I think have fared better because they have been able to work around some of these supply chain issues much more effectively than perhaps some of the smaller players in the market.
This all must be a fascinating case study for you as someone who studies logistics, right? What what are you paying attention to?
Well, the thing that I'm most inspired by and then I've been watching personally, has just been how supply chain issues have really met us at our front door. In a sense, the fact that today's consumer is just so much more aware of supply chains, the importance of supply chains, and really how vital they are to our everyday lives. So for me, this has really been a very significant moment where we have seen just significant education relative to how important supply chains are to how we live our day-to-day lives.
How are retailers adapting to these new pressures?
Well, a lot of things we're watching there. I think we're seeing a lot of retailers, for example, moving products from ocean to air freight. Again, that comes at a pretty penny. So it does, maybe we seeing a lot more of that in the larger retail space. But we are seeing transitions to air freight. We're seeing retailers really offer and focus on a lot of substitution. So again, as we expect that there might be significant shortages and stock outs during this holiday rush, we are seeing retailers getting prepared to offer substitute products and to really capture consumers before they walk away empty-handed. And I think we're also going to see some really interesting things in terms of product price as retailers grapple with the significant increases in costs that they've had to incur in order to get products to the market.
What are your big-picture predictions for this holiday shopping season? How are things shaping up?
This year is going to be interesting, I think we're going to see a lot more of a focus on more experiential gifts, so things that are more experience based as opposed to product base. For those shoppers that are looking for those gifts that are products, I think we're going to see a lot more of a focus on a little bit of wiggle room in terms of you know what we buy, so we may be looking for a sweater in red, I think we might have to grapple with the fact that we can only get it in green or black. And I think we're gonna see a lot of that this year as we continue to work around all of these issues that we're facing.
