IU expert: Holiday shopping outlook brings good and bad news
INDIANAPOLIS (WISH) — Holiday shopping is on the horizon, despite rising inflation and supply chain uncertainty. One Indiana University business professor has some advice on what shoppers can expect.
Kyle Cattani is a professor of operations management at the Kelley School of Business at Indiana University, where he teaches and researches supply chain management.
Cattani says there’s both good and bad news this season. The good news is, supply chains are starting to catch up. The bad news is, supply chains are catching up because the economy is slowing down.
“I believe this Christmas will be a story of feast or famine. I strongly suspect we will see some shortages of goods. In other cases, there will be ‘fire sales’ as firms try to get rid of the excess inventory that has accumulated as supply chains overreacted to the shortage of the last year,” Cattani said. “My advice is to be flexible and opportunistic. There will be shortages of many products but there will also be no warehouses of other products that are going to go on sale.”
Cattani says that in 2021, there wasn’t enough inventory after businesses cut back in supply during the start of the pandemic. In response, businesses ramped up what they were making this year. Now, some industries have an oversupply of items, and inventory is starting to pile up.
In that case, Cattani says, there could be some great sales for shoppers, as long as people are flexible and take deals when they find them.
When it comes to tech items, semiconductor chips are still in short supply, but things are improving. Cattani says it’s hard to predict the impact of the ongoing shortage, but prices are likely going continue to increase.
“For this holiday season, you might have a harder time finding that shiny new phone,” Cattani said. “But, on the other hand, General Motors has been in the process of clearing out backlogs of nearly completed cars. These are cars that were completed of everything but chips and they have been waiting in parking lots. Now that the chips are becoming more available, the cars are leaving the lots, so the shortage of cars may be easing this winter.”
While Cattani says the shortage of cars may improve this winter, he also says the entire automobile industry is in the process of a huge transition to electric cars. He expects this to create supply complications over the next few years, especially in the production of batteries.
Shoppers looking for a great deal might be in luck this year. The Adobe Analytics online shopping forecast predicts that discounts will hit record highs, upwards of 32%, as retailers deal with too much inventory and people have less money to spend.
Adobe Analytics also expects Cyber Monday to be the biggest shopping day of both the holiday season and the year as a whole.
According to Adobe, U.S. online holiday sales are expected to be around $209.7 billion from Nov. 1 to Dec. 31, representing 2.5% growth year-over-year.
Whether you’re shopping in-store or online, Cattani has a final piece of advice: Keep an open mind and save up some money, and you might be surprised by the opportunities you find.