Four ways to Prepare for the Unexpected This Holiday Season

Posted: October 11, 2021
Category: Spotlight on Business

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.

  • Sixty-five percent of shoppers plan to spend the same or more than they did last year.
  • Eighteen percent of consumers plan to spend $265 more than in 2020
  • Sixty-six percent of shoppers plan to spend over $400 on gifts (43 percent plan to spend over $600 (Inmar Intelligence consumer holiday survey)

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).

Prepare for Supply Chain Delays

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.

  • 40 percent of online customers are more likely to buy if they know delivery dates
  • 70 percent are less likely to make a repeat purchase from retailers who don’t inform them the merchandise shipment will be delayed (Forrester 2021 Holiday Planning Guide)

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.

Expect E-Commerce to Keep Growing

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.”

  • 50 percent of consumers say the pandemic persuaded them to shop more online (Radial survey)
  • 23 expect items to arrive in two to three days vs. 14 percent in 2020
  • 45 percent of omnichannel retailers cover shipping costs (Benchmark report)
  • 42 percent of retailers do not explain their refund policy

Keep BOPIS and Curbside Pickup as Buying Options

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.

  • Eighty percent of consumers have used BOPIS (Treasure data survey)
  • BOPIS is the preferred shopping method for 32 percent of consumers)
  • 55 percent of retailers will continue using curbside pickup (2021Future Stores Holiday Report)

Understand the Changing Role of frontline employees

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.

  • 87 percent of consumers want to shop in stores with touchless options or self-serve checkouts
  • 57 percent of retailers plan to invest in technology or mobile devices for use by employees

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.

  • Empower employees to do their jobs safely and successfully
  • Help associates transition from task-oriented workers to team members whose input and ideas are valuable assets in effecting change

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.