Holiday shopping season starts early amid supply chain woes

Yahoo Finance contributor Vera Gibbons discusses the early start to the holiday shopping season and the price tags coming with it.

Video transcript

ZACK GUZMAN: Well, pick your poison here in our Your Money segment. When it comes to holiday shopping, 2021 is looking to be already a very tough go. And for your shopping list, planning may have been best started a few weeks ago, given the shipping delays and potential price increases we're expected to see this year. Inflation, of course, and COVID-19 impacts on the supply chain have not gone away. And for more on that, I want to bring I'm Yahoo Finance's Contributor Vera Gibbons, who's been tracking what this shopping season this year is going to look like. And, Vera, I don't think there's any optimism out here, but maybe talk to me about how bad some of these things have gotten and the expectations around holiday shopping this year.

VERA GIBBONS: 'Tis the season for challenges, Zack. I mean, it looks to be a pretty rough going for consumers. You know, it's really the fear of stockouts, most commonly associated with toys and electronics, that got the shoppers out extra, extra early this holiday season. I mean, some shoppers I spoke to actually started their holiday shopping last summer. But the thing is, even then, they weren't able to find what they actually wanted-- the right toys, the right sweaters, the right sizes, the right colors.

So what we're seeing now is people taking matters into their own hands and finding alternatives. So one big alternative is the gift card. You know, I saw one statistic showing that sales of gift cards are expected to be up 27% this year, which is just phenomenal. It's always a popular gift, this year in particular will probably be even more popular. I saw one statistic showing consumers are going to spend on average a couple hundred dollars, even more than that, and get about 15 gift cards on average. So that's a big area for growth this holiday season.

I think people are also going for experience this holiday season. They can't find what they want, so they're actually taking the kids to Disney or gifting trips to their loved ones. And another big trend we're seeing too is people shopping locally. I mean, local stores obviously have their problems too related to supply chain issues. But they have unique items. They have different types of items. They have some in stock-- perhaps more readily so than the big mass chain retailers.

And I think this year in particular, people really want to support small business. I mean, the whole shop local thing has been out there for years, but I think people really see now how important these small shops are to their communities. They want to go to these shops. They want to give back to their communities. They need these shops, and the shops need them. So I think it's going to be a big year for small business.

ZACK GUZMAN: And I guess we saw some of that with earlier gift card purchases, when things were closed trying to help out and keep some of their favorite local stores open, a lot of people turned to gift cards. But I guess, you know, when we talk about the other aspects of all this in terms of spend and the delay in spend in terms of the pandemic-- people have been staying home more, maybe more to spend around the holiday shopping season-- I mean, what are the expectations there in terms of Americans shelling out more?

VERA GIBBONS: Yeah, that's interesting, Zack, because if you look at the projections, I mean, some projections are as high as over a trillion according to Deloitte, which has a projection of $1.2 or $1.3 trillion, which is a phenomenal number. These gains are being driven by those pre-pandemic habits you mentioned, like socializing, entertaining, going out more, going for the experiences, going for the trips, the hotels. That's contributing to a large part of the big gains we're seeing this holiday season.

Of course, the gains are also being propelled by those high income earners because they have more money to spend. They have the stock market wealth, they have housing wealth. And when you feel wealthy, you actually spend more money. So it is expected to be a very robust holiday season, despite the fact that there is not a lot of physical toys actually out there to buy. In fact, if you go out there, you know, you won't see hardly anything on the shelves.

The shipments are coming in very sporadically. And the promotions are far and few between this holiday season thus far. I mean, some of the shipments will come in here, and now, and maybe later in the season might be too late, but it's kind of a very complicated season for holiday shoppers, which is why a lot of them got the jump start, and now they're sort of sizing up potentially other alternatives.

ZACK GUZMAN: All right, brace yourselves for more gift cards and socks maybe. That's how desperate we're going to be this holiday season. Vera Gibbons, Yahoo Finance Contributor, bringing us the latest-- appreciate that.