This year’s holiday shopping season will see numerous shortages of consumer electronics products due to rampant supply chain constraints. That, in turn, will lead to less discounting, analysts say.
“The supply chain disruption is going to play a huge role in the shape of the holiday season,” Patrick Brown, vice president of growth marketing and insights at Adobe (ADBE), told Investor’s Business Daily.
Already, out-of-stock messages on U.S. e-commerce sites across all consumer products have risen 172% going into the holiday season, compared with the pre-pandemic period in January 2020. Apparel has the highest out-of-stock level now, followed by sporting goods, baby products and consumer electronics, according to Adobe Digital Economy Index data.
And compared with January 2019, out-of-stock messages are up 360%, Brown said.
“The digital equivalent of the empty shelf is the out-of-stock message when you’re trying to buy something,” Brown said. “The supply chain has struggled to keep up with the demand since the pandemic started. But it’s really become more acute as we move into the holiday season.”
Smaller Discounts This Holiday Shopping Season
Because of supply chain challenges, major gifting categories will see smaller discounts this holiday shopping season, Brown said.
Discounts on consumer electronics will peak at 22% this holiday season, down from 27% in 2020. Discounts for personal computers will top out at 25%, vs. 30% last year. And televisions will see discounts peak at 15%, vs. 18% last year.
Online prices are elevated heading into the holiday season, something Adobe hasn’t observed before, Brown said.
“Usually, prices are down 5% as we go into the holiday season,” he said. Prices in September were up 3.3% year over year, Adobe data shows.
Still, U.S. consumers are in a buying mood. Adobe predicts that U.S. online holiday sales will hit $207 billion from Nov. 1 to Dec. 31, setting a record. This would represent a 10% increase from 2020.
Surging consumer demand for online shopping is happening as retailers contend with dire supply chain challenges, Brown said. Those challenges range from crowded ports and cargo delays to disruptions in overseas manufacturing.
Top Consumer Electronics In Demand
Consumer electronics products in high demand this holiday shopping season include video consoles such as the Nintendo (NTDOY) Switch OLED model, Sony (SONY) PlayStation 5 and Microsoft (MSFT) Xbox Series S and X, Brown said.
Top game software titles include Nintendo’s “Metroid Dread,” “Pokemon Brilliant Diamond” and “Pokemon Shining Pearl.” Also in demand are Microsoft’s “Halo Infinite” and Electronic Arts (EA) games “Battlefield 2042” and “FIFA 22.”
Adobe data also points to strong sales of big-screen televisions and Apple‘s (AAPL) AirPods Max headphones.
The NPD Group predicts that U.S. consumer electronics sales will rise 2% by revenue in the fourth quarter from the same period last year. However, unit sales are forecast to fall 5% year over year, NPD analyst Stephen Baker said in a note to clients.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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