Holiday decorations and gift items are flying off the shelves faster than retailers can restock. Consumers are aware that merchandise will be in short supply this season, and it’s best not to wait until the last minute for better deals or broader assortments. There’s a possibility it may never happen. Fifty-seven percent of consumers plan to shop early. Deloitte anticipates holiday sales will reach $1.28 to $1.30 trillion from November to January.
Large and small retailers are dealing with many unknown variables and building upon what they learned regarding consumer buying habits in 2020. Although government-sponsored stimulus checks will not factor into holiday spending, analyst forecasts sales will rise 7 percent to 9 percent—almost double the industry’s annual growth rate.
Boomers will lead the way in increasing their spending (67 percent plan to spend more), followed by Gen X (65 percent) and Gen Z (58 percent).
In a recent KPMG survey, 82 percent of executives who participated are concerned about inventory shortages, and 57 percent of them plan to have extra inventory on hand for unexpected shortages. Consumers don’t like surprises and make little allowance for shipment delays.
The Berkeley Research Group research group recommends that retailers sell gift cards as a contingency plan since 50 percent of consumers want to receive them.
Consumers have resumed shopping in physical stores, but e-commerce remains an essential element in the buying journey. Only 14 percent of U.S. shoppers reported to Google and Boston Consulting Group they will not shop in stores this season. “But as in-store shopping resurges, digital’s role in shopping has been cemented, as more than 70 percent of surveyed participants reported that their shopping journey involved online touchpoints. Digital will be a critical part of their journey, whether it’s online or in-store.”
Since consumers plan to do 45 percent of holiday shopping in physical stores, there remains a strong demand for Buy Online Pick Up in Store (BOPIS) and Curbside Pickup options.
Consumers are concerned about their wellbeing and that of employees when shopping in-store. Safety issues have driven the demand to limit unnecessary interactions with store associates and increase contactless transaction options. The gradual shift away from traditional point-of-sale lanes has placed more frontline retail employees into customer service roles. This may require directing shoppers to specific point-of-sale terminals or troubleshooting transactions.
Walmart is an example of how store associates now engage consumers to reduce shopping times and improve the overall customer experience. Retailers who want positive outcomes should commit to employee training that explains the associate’s new customer-facing role and how their actions deliver an engaging customer experience.
The holiday sales season is here, and retailers should do everything possible to ensure a profitable 4th quarter. There are no guarantees that the original sales plan or marketing promotions will work in today’s unpredictable market. Be flexible and make adjustments as needed to achieve success.