Chip shortage: A holiday shopping guide for a season scant on semiconductors

Each year, Black Friday serves as an economic cornerstone of the holiday shopping season, with retailers offering a number of deal sweeteners and “door-buster” discounts to lure shoppers. Amid a global semiconductor chip shortage, shipping delays and a modern plague, this year’s unofficial launch of the retail blitz may look a little different, to say the least. So, what products could be spared from the ongoing silicon shortages, and is it too late for people to start shopping?

Chip shortage: A holiday shopping guide

In recent months, the semiconductor chip shortage has hamstrung the production of products across industries ranging from new cars and laptops to popular gaming consoles. In the automotive space, nearly completed vehicles sans only chips are piling up as they await their brains. Shortages and shipping bottlenecks are only adding to the conundrum. Nearly one year after the release of the PS5 and Xbox Series X, gamers are still struggling to get their hands on a new unit.

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Katherine Cullen, the National Retail Federation’s senior director of industry and consumer insights, said these evolving supply chain disruptions “pose a threat to many retailers,” explaining that companies have used a number of “mitigation strategies” focused on these disruptions as demand has increased, this includes “moving up their peak shipping season to bring in product earlier than normal.”

Overall, she said many shoppers are “planning ahead and looking to check items off their list ahead of the holidays.” Citing a September 2021 NRF and Prosper Insights & Analytics survey, Cullen said 36% of holiday shoppers were planning to start browsing and buying for the season earlier than they usually do.

Historically, companies have used a number of tactics and flash sales to incentivize shoppers, so how are retailers enticing shoppers leading up to the holiday shopping season amid shortages?

“As retailers begin to stock their shelves and online inventory with holiday merchandise, they will also jump-start their seasonal promotions and deals so consumers can shop safely and shop earlier to avoid the last-minute stresses of long lines and shipping delays,” Cullen said.

Discussing how these shortages could specifically impact Black Friday shopping and preparation, Cullen said retailers have prepared for this holiday season for quite some time, explaining that companies are investing in tech to help consumers peruse available stock and list alternative store locations if a product is available elsewhere as well as anticipated delivery times.

Retail tech aside, much of the shopping conundrum hinges on consumers vying for a slice of the limited silicon pie as the holiday season fast approaches.

“These chips touch nearly every type of consumer technology, which has become one of the leading, if not the leading, gift category for the holidays,” said Jens Gamperl, CEO of Sourcengine.

Although Gamperl said it isn’t too late to start shopping, he warned that the shortages will likely “complicate” things and recommended starting the holiday purchases “as soon as possible” to mitigate the risks around shortages and shipping delays.

“Will there be a Black Friday this year? That’s a question I’ve been asking myself and my colleagues,” Gamperl said.

While he said businesses are doing everything they can to bring inventories to the market, “we know that products that bring people out in droves on Black Friday,” like popular gaming consoles, will be “even rarer than usual.”

Glenn O’Donnell, vice president, research director at Forrester said many consumer electronics including PCs, gaming consoles and smartphones will be in “short supply,” adding that “most products” that will pop up on holiday wish lists are “being made right now or already have been.”

“Buy early or you may not be able to later,” he continued.

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Throwbacks and low-tech holiday gifts

Interestingly, these supply chain disruptions could also pave the way for a spree of throwback gift-giving this holiday season. As we previously reported, the silicon shortage appeared to be spurring a retro gaming renaissance of sorts, as consumers seek throwback gaming systems amid new console shortages and restock issues. Aside from throwback games, comparatively lower-tech options, in general, could also have added appeal this year.

“Retailers claim they have sufficient inventory for the season,” O’Donnell said. “Products that don’t plug in or have batteries are likely in good shape. Many that require electrical power will be problematic.”

When asked if we could be heading towards a holiday shopping season focused on comparatively less technologically sophisticated items, O’Donnell said he believes the holiday shopping season will “indeed” tend to “skew more than expected toward low-tech gifts,” and anticipates the chip shortage to “likely” repeat this situation come holiday shopping next year.

But the upshot from a less tech-savvy season of gift-giving could have a few benefits for consumers to bear in mind. After all, necessity is the mother of invention, as the saying goes.

On this topic, O’Donnell said he is hopeful the “high-tech crisis could actually spawn some creativity with kids.”

“Instead of a doll that interacts verbally and has a Bluetooth connection to your smartphone, maybe the kid can engage in that magical imagination that kids naturally possess,” he continued.

Rather than more high-tech offerings, O’Donnell suggested gifting a child a classic Tonka truck they can manually push by hand.

“The future belongs to those with an imagination,” he continued. “I fear technology can sometimes dilute that imagination by doing everything for you.”

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