Production and shipping challenges have been on the minds of everyone in the consumer products and licensing businesses for at least a year, but as we move into the holiday season around the world, another party is being put on notice: shoppers.

There’s an urgent tone from suppliers and retailers with a simple message for consumers this holiday season: buy now.

Is September the new December?
That missive could be mistaken for a typical marketing ploy as retailers and suppliers prepare for the holiday season. But it appears that September could be the new December this year as surging consumer demand across multiple product categories clashes with shipping delays from factory floor to retail store raising the specter of widespread shortages.

“Our business is forecasted to be up 20%,” says Basic Fun CEO Jay Foreman, whose company has experienced 3-6-week shipping delays. “However, we worry that the last 10% just won’t ship this year due to the supply chain issues. Shipments are delayed in the chain from pick up at the factory to the China port, on board in China, offloading in the U.S. and trucking to get to the last mile. It likely won’t get much better and, for the next 10 to 12 weeks, likely worse.”

Early messaging
As early as mid-July, UK retailer The Entertainer was publicly urging consumers to shop early to circumvent shortages during the holiday season. And  the Toy Association in the U.S. is urging consumers to, in the words of  Executive VP Ed Desmond, “get out and buy toys now.”

“With everyone advising people to shop early for Christmas, retailers have a level of stock right now, but depending on what happens in the next few months, replenishment is not necessarily a given,” says Vicky Hill, Director of Licensing at Bulldog Licensing in the UK. “People are taking it seriously to shop early because what stock levels will be in November is anyone’s guess.”

Yet despite the challenges, Mastercard recently forecast total U.S. holiday retail sales will increase 7.4% — 7.6% online and 6.6% in stores – excluding autos and gas, while

And while delays at every link in the supply chain and a sharp rise in logistics costs have been standard issue this year, the retail industry is nearing crunch time. Notably, 82 percent of retail executives told KPMG that they are “somewhat” or “very concerned” about inventory shortages. To get ahead of the problem, 59% said of retailers surveyed plan to invest more heavily in safety stock and 55% plan to set up alternate supplies.

Retail CFOs, reports The Wall Street Journal, are “working to offset some of the hurdles, including ordering inventory earlier than usual, revising long-term contracts with ocean carriers, spending more on airfreight, increasing prices and moving their operations.

There’s cause for concern. For example, Funko could be sold out of some items by early November despite demand for them being an all-time high, says President Andrew Perlmutter. That’s because it relies on factories in Vietnam — a country that has suffered COVID-related shutdowns in recent weeks — for 70% of its non-plush products.

Another potential damper for any late orders that might be considered: A potential crimp in the supply chain looms late this year when factories start production for Chinese New Year in a move that reduces capacity for the tail end of the holiday season. In sum, says Bill Graham, Chief Business Development Officer at Phatmojo, “There have been gaps on retail shelves throughout the year. Even going into this year, we were hoping for the best and expecting the worst, and the worst has definitely persisted.”

One bright spot: While suppliers feared widespread wholesale price increases – Hasbro imposed some in July and apparel manufacturer G-III increased them 5-10% – that would be passed on to consumers and dampen spending, that’s occurring less frequently than expected. Inflation in the U.S. also is showing signs of easing. In fact, Hasbro is forecasting an “incredibly good” and “very, very solid” global holiday sales season as the company offset logistics issues by sourcing product earlier than previous years from “multiple” countries to ensure sufficient inventory, CEO Brian Goldner said.

“Many people have lived without travel and holiday expenses, so may have extra disposable income to bring some joy during the holiday period,” says Darran Garnham, founder of toy supplier Toikido. “But given the logistics challenges, those buying goods could still see some price increases.”