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Supply Shortages And Port Delays Driving Holiday Shoppers To Start Early This Season

“Elongation of the holiday time period is the new trend, [and] in light of all the constraints around the country and with port delays, everyone is saying ‘shop early."

Launched as a three-part series, The New Age Electronics Outlook brings together New Age Electronics President Fred Towns and select industry friends to share their thoughts on a variety of topics along with a forecast for the road ahead. Excerpted from the most recent video interview, this article highlights a conversation with guest Steve Koenig, vice president of research for the Consumer Technology Association.

Gifts, Ships & Chips!

Black Friday once signaled the official start of the holiday shopping season, but Halloween has taken on this role as the new kick-off. With shopping already underway and retailers strongly encouraging consumers to buy early, the fourth-quarter is shaping up to be unique with global supply chain concerns, a chip shortage and increased demand.

“Elongation of the holiday time period is the new trend,” said Fred Towns, president of New Age Electronics. “When Halloween ends and stores open on the first of November, the holiday season begins. In light of all the constraints around the country and with port delays, everyone is saying ‘shop early.’ Our retailers realize this and are enhancing their toolsets—providing in-store pick-up, online shopping, quick deliveries, and curbside pickup should things get a little tougher with flu season ahead. They’ve done all the intelligent work to get to this point.”

Not only has holiday shopping started sooner, it’s likely to extend past Christmas well into 2022, according to Towns. “There will be certain product that just isn’t going to make it here on time to meet the demand,” said Towns. “The supply is going to be limited and somewhat constrained even going into the first few months of the new year.”

Fred Towns, President, New Age Electronics (image credit: New Age Electronics) Steve Koenig, Vice President, Market Research Consumer Technology Association

Wrap up personal audio

As with previous holiday seasons, TVs will be a big item for the holidays, according to Towns. “Consumers want more content,” he said. “They’re looking for things to watch, and they’re cutting that cord. They’re streaming so Smart TVs that have that capability are going to be very popular this season.”

Towns also pointed out that as consumers’ lifestyles have changed with an evolving balance of work-home environments, it has opened a range of technology products like headphones and earbuds.

“With our daily lives that now include meetings on Zoom people want earbuds for those calls or for personal time or headphones for listening to music,” he said. “Both are going to be very popular for the holidays. Gaming in the AR/VR world is new and exciting. It’s been out for a couple of years, but it’s getting more sophisticated. A lot of our retail partners are jumping on that because consumers, while working at home and enjoying this new environment, want options to keep the family involved and entertained. It’s fun and interactive.”

Not surprisingly, computers will be high on holiday gift lists, too. “When the pandemic first hit people had to make sure they could remain connected, but now it’s about deciding what they want to use as their toolset. With upgrades happening now with Windows 11, it’s a great chance for our retail partners to help our consumers understand the advantages of new programs and guide them as to what will be the right computer to buy going forward.”

Home control is another top category. “It continues to be exciting,” said Towns. “We’re seeing across all of our vendors that products this season are simpler to use and more sophisticated.”

This season the bottom line for retailers, and ultimately consumers, is to have a game plan. “What’s coming out for the holidays are a lot of fun things, but we’re repetitively saying shop early,” Towns said. “Go look, check your retail stores and make sure you get what you are really coveting this year—early!”

For Steve Koenig, vice president of research for the Consumer Technology Association, all of those points ring true. “I am pleased to corroborate what Fred is talking about,” he said. “And I have a view to holiday through the lens of our latest holiday research.”

The 28th Annual Consumer Technology Holiday Purchase Patterns report identifies consumers’ holiday tech purchase plans. “This holiday actually has some interesting data that is very appropriate for these times,” said Koenig. “We’ve been hearing at CTA for some time now that allocations are going to be tight this holiday, just as they were in 2020. The good news, according to our holiday research, is that consumers are paying attention. About 68 percent of holiday tech shoppers say they intend to start shopping earlier.”

Steve Koenig, photographed for the Consumer Technology Association (CTA) in Crystal City VA, 12 July 2018.

Topping the CTA list of planned holiday purchases is personal audio, including wireless earbuds and headphones. “This is becoming a perennial favorite for holiday tech gift giving,” Koenig said. “It’s a great gift. We tend to use a lot of different shapes and sizes for different purposes—whether we are working out, traveling or just at home. It’s number one on our holiday gift list.”

Beyond that, noted Koenig, it’s the usual suspects. “These are core or hub devices like TVs or smart watches and obviously computers are on the list,” he said. “For entertainment, it’s game consoles—another product that’s in short supply with tight allocations.”

Dock the ships; then deck the halls

While the massive rollout of COVID vaccines has returned some normality to the 2021 holiday season, it hasn’t cured everything. The pandemic has unfortunately created several challenges, including disruption to global supply chains struggling to bounce back.

At press time, the Port of Los Angeles and the adjoining Port of Long Beach, which handle 40 percent of the country’s imports, are battling a major backlog. More than 70 cargo ships—with everything from furniture to toys to electronics—are delayed and adding to the season’s chaos.

According to both Towns and Koenig, supply will continue playing catch-up for some time and that means into next year. “It’s been a problem not just for our industry but for exporters of commodities like corn, wheat, rice and pork products,” said Koenig. “So how are we going to fix this?”

Fortunately, it’s already on the radar for Congress. “There is a bill on their desks called the Ocean Shipping Reform Act of 2021,” Koenig said. The bipartisan legislation, the first major update of federal regulations for the global ocean shipping industry since 1998, would support American exports by establishing reciprocal trade opportunities to help reduce the United States’ longstanding trade imbalance with China and other countries.

“Over 150 organizations and trade associations have signed onto this legislation including CTA,” Koenig noted. “As viewers know, one of the things CTA does is to advocate for responsible technology policy, and we’re very active on Capitol Hill. This bill has bipartisan support because this is an issue affecting every facet of the economy. People can’t get products; they can’t get components. It’s crimping sales, the economy, the GDP. We need to fix this crisis.”

The legislation, Koenig continued, will establish new ground rules for shipping and more fair-trade practices to hopefully unwind the friction at U.S. ports as well as reduce costs. “Companies are having to pay 2, 3, 4 or even 5X for a 20- or 40-foot shipping container—if they can even get them,” he said. “It’s not just a U.S. thing; this is global. But at least here in the U.S., Congress is taking this seriously and we should hopefully see some action before the end of the year.”

“Companies are looking at options of how to get product in before the holidays, but they’re also being realistic about what they can expect for the first part of next year,” said Towns. “We’re talking with all of our customers and all of our vendor partners to make sure that the numbers they are turning in to us are good forecast numbers. Demand is way up because of where we are now, but with products coming in late that might cause that demand to shift and equalize a bit better.”

When the chips are down

As for the continuing chip shortage, the big question is when will it be over? “There’s really not an easy answer,” Koenig said. “Strategically, when you look across the semiconductor industry there is a short-term answer to this problem and a longer-term answer. In general, we don’t start to get some real relief until, unfortunately, 2023. The short-term answer is building in more capacity at global factories and fabs. They’ve already been doing this—they may have achieved an 8 percent gain—by expanding facilities or adding a third shift. But the long-term answer is that we just need more chip foundries globally. Some of the larger chip makers like Intel, TSMC (Taiwan Semiconductor Manufacturing Company) and Samsung have already announced plans for this, but you’ve heard the phrase Rome wasn’t built in a day. Well, neither are chip foundries and factories so this could take years to manifest. After we get through it—sometime in 2023—we will see greater geo-diversity of fabs and we’ll probably see more cooperation between the EU 27 and the U.S. as we look to hedge against all of our eggs—or chips—in one basket in East Asia.”

Making spirits bright

Even with issues and uncertainties looming over the next few months, things could turn out merry and bright for holiday 2021.  CTA estimates holiday shopping will total $142.5 billion this season, a half-percent gain from 2020.

“Yes, it’s just a half-percent, but consider that 2020 holiday in terms of retail spend on tech gifts was a real banner year,” Koenig said. “Because of the friction we’ve talked about with chip shortages and with logistical challenges, we will probably see a units-down situation, but consumers’ wallets are open. They are very willing to spend, and we will see that more on premium brands and consumers buying up-market in several cases.”

Koenig noted that while units may be down overall, retail revenue will probably be up, which could be good news for same-store sales and comps.

“Fred touches on this—spending on content. We see this in our research. Over 54 percent of consumer are planning to spend on some type of content subscription, whether it’s gaming, audio/video or maybe health and fitness,” he said.

With their wallets open, Koenig expects consumers to literally and figuratively pull every lever they can to get product they want. “In terms of their plans to shop in-store or online, consumers are going to do whatever it takes,” he said. “Omnichannel is going to be omnipresent. Retailers are on notice that they need to be able to meet that customer wherever they are—online or offline. We expect a lot of activity both online and in stores as consumers feverishly go about their shopping.”

According to Towns, retailers are ready. “Consumers will be in stores shopping again, and many of our retail partners have done a good job in the time that the traffic has not been as heavy. They have updated their stores and displays and worked with their vendor partners to make sure the shopping experience is exciting for consumers when they walk in those doors,” Towns said.

“Our job now is to help them have those shelves filled with the right inventory so when customers do come in they’re ready to buy or to pick up in store,” he said. “It will be a good holiday season, but we have to be smarter in how we plan for it.”

About New Age Electronics
New Age Electronics, a division of SYNNEX Corporation (NYSE: SNX), is a sales and supply chain solutions innovator that provides consumer technology (CT) manufacturers with a broad offering of logistics, distribution and remanufactured services. Extensive experience in the CT industry and a customer-centric approach has made New Age Electronics the provider of choice. New Age Electronics distinguishes itself with efficient operations and relentless focus on customer satisfaction. Founded in 1988, New Age Electronics is headquartered in Carson, California.

For more information about New Age Electronics, call (310) 549-0000, toll-free (888) 234-0300 or visit the company’s website at

See also: The New Age Electronics Outlook Part 2 – Forecasting the year for retailers with Fred Towns and Industry Friends