US & Global Economic Impact Analysis and Forecasts

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Seasonal Shipments Have a Tight Window of Peak Sales, But Goods Are Stuck in Transit

Seasonal businesses are feeling the crunch. While the warming weather and the hoped-for respite from COVID-19 outbreaks is spurring rising interest in a fresh wardrobe, outdoor recreation products, and gardening supplies and equipment, supply chains are not all able to keep up. Seasonal goods, particularly those being imported from Asia, are stuck in ports, waiting for an available container ship, waiting to be unloaded, or waiting for available trucks to get them to their final destination.

Suppliers of seasonal goods face a special challenge: a limited selling season during which goods are available for consumers when they want it. In most parts of the US, there is not a year-round demand for spring and summer clothes, gardening equipment, outdoor furniture, outdoor cooking equipment, pools and related supplies, and outdoor sports and recreation equipment.

Therefore, retailers and wholesalers must either store any products that are not sold during the peak window of sales or sell them in off-peak periods at what could be steeply discounted prices. The potential need to discount the price of products that do not arrive in time is particularly problematic as companies have often paid a premium (due to still sky-high shipping costs and inflationary pressures on materials and production in general) for these goods. Warehousing is also a challenge as warehouse space is costly for many and there is no guarantee that they will be able to sell the goods in the next season for the price necessary to cover the high costs associated with this current season.

Plus, as spring is seen by many as a period of awakening from our winter slumber, this is often the time of year that people are looking to refresh their homes, their wardrobes, their yards, their gardens, and their habits. As a result, many consumers are in the mood for something new, and styles warehoused from the previous season may not be attractive to consumers.

Therefore, suppliers and retailers are left with the challenge of ordering (how much and when) as well as with what to do when the goods don’t arrive when needed.

Many expect that supply channels will remain delayed for at least the next year or so. Shipping continues to be costly and will likely remain elevated, although not at the unprecedented levels experienced over the last few years. This, along with other inflationary pressures, makes season products a challenge as businesses and retailers ask themselves “how much is enough and will high prices deter customers in what has been a hot market?”

The threshold remains to be seen as consumer interest in outdoor living goods and a freshened wardrobe is still there. Freedonia analysts will continue to watch these trends for indications of directional change.

For more information and discussion of opportunities, see The Freedonia Group’s extensive collection of off-the-shelf research, especially coverage in the Consumer Goods markets. Freedonia Custom Research is also available for questions requiring tailored market intelligence.

  Consumer Goods      Covid-19