Americans could pay 20% more for holiday gifts this year, analysts say
SAN FRANCISCO – Salesforce, a global software company, predicts that holiday shoppers could pay up to 20% more for their freebies this year compared to last year.
The company also predicts that online sales will increase by 7% after the 2020 holiday shopping season.
Company analysts point to several reasons why wallets and handbags could be affected this year – from the COVID-19 pandemic to safeguarding cargo ships at US ports.
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Tens of thousands of containers are stranded at the ports of Los Angeles and Long Beach, Calif., The two West Coast gateways that carry more than a quarter of all U.S. imports, according to the Wall Street Journal. . More than 60 ships are lined up to dock, with waiting times of up to three weeks.
Participants at every link in the American chain – shipping companies, port workers, truckers, warehouse operators, railroads and retailers – blame others for the imbalances and disagree that 24/7 operations. 24/7 will help them catch up. All are struggling with a labor shortage, according to the Journal.
The COVID-19 pandemic has also had an impact on manufacturers.
The more transferable delta variant shut down the economy in Asia, including Bangladesh, where many garment factories temporarily closed during the summer. Bangladesh garment factories are part of the second largest garment industry in the world. Since the pandemic began in March 2020, the Bangladesh Garment Manufacturers and Exporters Association estimates that the industry lost $ 3 billion in orders last year.
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In addition to bottlenecks at ports and the pandemic, Salesforce says businesses continue to face a labor shortage even as the U.S. economy rebounds after the 2020 global lockdown.
Restaurants and hotels have been “ground zero” for the labor shortage, but other sectors are struggling to fill jobs, including non-union construction and home health care, said Michael Bernick, former director of the California Employment Development Department.
If there is good news, Salesforce predicts a 94% decrease in packages at risk of delay, or 40 million packages worldwide, from 700 million last year – with just 5 million packages likely to be delayed. be delayed in the United States. Attribute this to the fact that more Americans are placing larger and fewer orders, and 40% of U.S. retailers are opening physical stores that provide online consumers with a place to pick up their packages.
“As the last vacation was defined by the last mile, this year should be dominated by the first mile,” said Rob Garf, vice president and general manager of retail at Salesforce, in a press release. “With continuing disruptions to the global supply chain, retailers must attract consumers to their online and physical stores early in the season to meet demand and capture vacation spending. “
RELATED: Port of Los Angeles sees cargo safeguards amid growing demand for consumer products
Salesforce also said marketing departments may have a harder time tracking consumer behavior this year. The company says user activity through third-party data is expected to become more expensive, as global legislation and consumer preferences bend to increased internet privacy.
Through it all, retail experts say it’s best for Americans to start their holiday shopping early.
“Getting a head start on holiday shopping is crucial this year. Many toy makers like Mattel and tech makers are struggling to navigate the supply chain and keep shelves stocked, ”said Brett Rose, Founder and CEO of United National Consumer Suppliers. “Unfortunately, that also means they are struggling to keep prices low. By the time the shopping season is over, it will be too late for most.”
The Associated Press contributed to this story. This story was reported from Los Angeles.