black friday shortage

What you need to know about Black Friday 2021

Black Friday falls on 26 November 2021, and it’s going to be a very big deal this year. According to UK retail analyst Springboard, footfall in stores will be up 80.9% over last year and online will be bigger than ever. But while Black Friday 2021 is going to be big, it’s also going to be different.

The biggest difference, of course, is that the US and the UK aren’t suffering as badly from COVID-19 as this time last year. Stores are open, nothing’s locked down (at the moment) and nobody’s panic-buying webcams because they suddenly have to live and work on Zoom. But there are some problems too. (Ready to bag a bargain right now? Check out the best early Black Friday deals.)

Why will Black Friday 2021 be different?

Arguably the biggest issue around Black Friday 2021 is the global semiconductor shortage. That affects everything from cars to computers: while the car industry has been the hardest hit, the shortage has also affected all kinds of consumer electronics – not just computers but items such as electric toothbrushes and tumble dryers too. If it has chips in it, and these days pretty much everything does, its manufacturer will have been struggling to get the components at the right price in sufficient volumes.

Before COVID, microchip makers were already struggling to cope with demand and problems including fires, power problems, and a severe drought in Taiwan that left chip makers without the water that’s a crucial part of chip manufacturing. Then COVID hit. Many factories shut down completely while demand went through the roof because we were all bored and stuck indoors.

According to STMicroelectronics CEO Jean-Marc Chery, we won’t “return to a normal situation… before the first half of 2023”. Even if he’s pessimistic, it’ll be many months before the semiconductor shortage is over; Intel CEO Patrick Gelsinger predicts it’ll continue until 2022 and possibly even into 2023.

It’s hard to predict. Some manufacturers have allocated the components they do have to their most high-priority products and delayed or shelved production of less important models, so for example Samsung did that with some of its displays earlier this year. It’s one of the reasons why Sony has been struggling to make enough PlayStation 5s, and it’s also reduced the supply of OLED TVs.

What other products are likely to be hard to find?

Graphics cards. Because of rocketing demand for GPUs from cryptocurrency users, a motley crew of scalpers, bots and miners have made it almost impossible to get a high-end card without paying a sky-high price. According to NVIDIA boss Jensen Huang, GPUs are going to have supply issues well into 2022. That’s despite NVIDIA limiting mining performance in some cards, such as the RTX 3060.

Are there any other issues that could affect Black Friday 2021?

Buy now pay later services boomed during COVID, and they could help retailers by making items feel more affordable: Affirm has just signed a deal with Amazon to offer buy now pay later purchases of $50 or more, and Klarna and PayPal Credit will appear on lots of retail sites this Black Friday.

Are retailers going to do things differently on Black Friday 2021?

According to Bloomberg, this Black Friday season could be rather boring: “With shoppers buoyant (for now),” Andrea Felsted writes, “there’s little need to simulate demand, while supply shortages and higher shipping and labor costs will push retailers to protect margins. That all adds up to fewer doorbusters.” Statistics appear to back her up: “Stacey Widlitz of SW Retail Advisors tracks 60 chains across the U.S. and Europe. At more than 90% of them, she says, promotions are down compared with 2020, when they were already being reined in.”

The big beasts – the WalMarts and Best Buys, the Amazons and the ASDAs – will probably be fine: they order massive quantities well in advance, although there may be less variety and fewer items on sale overall. But according to Felsted, “smaller chains may struggle to secure enough stock. That doesn’t bode well for choice, or a frenzy of special offers.”

In the UK, there’s Brexit: since the UK left the European Union it has experienced significant retail shortages in part caused by a lack of truck drivers. There are also additional bureaucratic barriers in bringing goods from Europe and problems at English ports causing severe shortages of some toys, and dramatically rising food and energy costs could well depress UK sales too.

Will online be more important during Black Friday 2021?

Yes, in both positive and negative ways. The shift from in-person to online shopping was already happening before COVID lockdowns, and that trend will continue – not least because despite vaccination programmes, COVID hasn’t gone away. But there’s a problem with online too: online sales are higher than ever, and some firms are already struggling to cope; in the UK, the truck driver shortage that’s leaving supermarket shelves bare is likely to affect Black Friday shopping too.

When will the Black Friday deals in 2021 begin?

They’ve begun. Amazon is already offering “epic daily deals” and we’re seeing Black Friday-style deals from the likes of Target and Best Buy. A number of US retailers including Macys and Guess created their own version of Black Friday for the 10th of October, 10/10, although as Andrea Felsted notes, “Perhaps as a taste of things to come, some participants had to pull out of the live-streamed event at the last moment because of a lack of inventory.”

Many retail analysts expect this year’s Black Friday to last for the whole month, but predict that supply issues mean you probably won’t be able to ignore good deals in the hope of seeing better ones later. As Sheri Lambert, assistant professor of marketing at Temple University in Philadelphia told the Associated Press, “My no. 1 tip? Shop now. Order that special gift for that special someone today. And even then, anticipate and expect the worst – but hope for the best.”

 

Source: creativebloq

About the Author

Helen Miller

Helen Miller is a freelance writer at CouponKirin. She covers personal finance topics in a syndicated column that appears in Financial Planning Magazine. Her work has been featured by Market Watch, Digital Journal, Chicago Tribune, USA Today, and Yahoo Finance. Helen has a bachelor’s degree in finance from the University of California, Los Angeles.