It seems that literally everyone is talking about supply chain issues at the moment. It’s been a topic of conversation that has been running through the virtual corridors of the MIA for the whole year, indeed we have had numerous drop-in sessions exploring the problem and we dedicated a large chunk of time at our recent in-person event discussing it.
The general public have also got wind of it. At the start of lockdown it manifested itself around toilet roll and dried pasta, and lead to a wave of panic buying and fisticuffs in supermarket car-parks. And that wasn’t even about a supply shortage, just a short term logistics issue.
What we have now is a more deeply rooted global issue impacted by component part shortages, availability and cost of shipping solutions and factories running below normal production capacity for extended periods. The result, well there is just less of a whole raft of products, particularly consumer electronics working their way through the supply chain.
Media coverage has been widespread, and as you would expect has settled on the potential for disruption to the mother of all institutions, Christmas. Whether it’s the Turkey (shortage of farm workers), Beer (shortage of CO2) or Electronic Toys (shortage of computer chips) most consumers are expecting challenges to their Christmas norms and are planning accordingly.
Data from leading analyst Kantar suggested that 60% of UK consumers are concerned about shortages over the next few months and Mike Watkins, of analysts NielsenIQ has been quoted as saying “shoppers tend to leave most of their Christmas grocery shopping later in November, but clearly this year we’re seeing late-November demand brought forward into October because of the concerns consumers have read and heard about”.
According to M&S, customers are shopping early this year, and are expecting to have finished buying gifts by the end of November. Figures from the BRC would support this view with October trending up on the previous month, with the UK ahead of Spain, Germany, Italy and France.
So what does this mean for MI?
Over the past 25 years working in or around MI Retail I have got used to the same question being posed – will Christmas be early or late this year? As far as musical instruments are concerned my experience has been ‘quite late’, with last minute purchases of guitar packs, drums and home keyboards often the norm.
If this year’s wider trend works its way through however we could expect to see this pulled forward into November, as parents, partners and friends act to secure the gift of music for their loved ones. The lure of a last minute bargain isn’t the determining factor it has been in previous years and as such you can expect to see an increase in traffic much earlier. I was in a major shopping centre last Saturday and it was ‘second week in December’ busy with notable queues outside Game, Apple and the Lego Store.
If this does indeed turn out to be the case it will be a relief for many retailers, the recovery for many has stalled a little coming out of the summer and an early ‘golden quarter’ would be most welcome.
However, there may also be a reason for a little more optimism. We know that supply shortages will mean less bikes, less games consoles and less consumer tech – so maybe this year we could have both an early and a late Christmas?
For some gift-givers the electronic drum kit or the acoustic guitar may work its way up the list if the first choice present becomes impossible to get hold of. It’s not inconceivable that (inventory permitting) we get a late surge of sales and perhaps we should be preparing for it, after all there has probably never been a better time to remind people of the gift of music.
