Preparing for Holiday Shopping (and Shipping) During a Pandemic
As we approach this year’s holiday season, one thing is certain: holiday shopping will be anything but traditional. Consistent ebbs and flows in retail sales, paired with COVID-19 resurgences across the U.S., have completely transformed consumer behavior as we know it — paving the way for an unprecedented holiday shopping experience.
According to our latest FCI survey, consumers are facing some doubts when it comes to going back to pre-pandemic activities, and shopping is no exception. Case in point: 52 percent of consumers are visiting physical stores less frequently, and 28 percent are ordering more products online. This shift in consumer behavior will drive a surge in e-commerce and a rise in alternative purchasing methods, such as curbside pickup and mobile ordering. With 64 percent of consumers reporting that they plan to do their holiday shopping mostly (or completely) online, there's immense pressure on retailers to quickly adapt and prioritize their digital shopping experiences for the long term.
Here are three things that retail and supply chain leaders should keep in mind when preparing for this year’s holiday season.
Consumer Personalization Will Be Turned on its Head — for the Long Term
There's no question that the past year has been a challenging one for retailers; case in point: 27 enterprise retailers have announced bankruptcies in 2020 so far. However, consumers are still prepared to continue their normal spending patterns despite the tough year. In fact, only one-third of consumers are planning to spend less than their normal amount this holiday season. As such, retailers must navigate how to give consumers the personalization they crave while still meeting their socially distant, digital-first demands.
Retailers need to meet consumers where they are across multiple channels in order to improve user experience and drive personalization across the entire customer journey. This is because, in a world of hyperpersonalization, there's a large need to get the digital experience right — the first time around.
Early-Access Deals Steal the Show
It's estimated that as much as $6 billion of retail spending in the U.S. tends to take place during Cyber Week in November, and as much as $26 billion globally is expected to be pulled into October this year. That proves one thing: when it comes to the holiday season, there's no such thing as too early, too soon or too prepared.
E-commerce and big-box retailers alike have been offering online shopping deals since October, from electronics to clothing to cookware. It's predicted that consumers may even splurge more than usual on gift buying this year, after a lack of spending throughout the spring and summer. Ultimately, it's no question that early-access product deals and sales will be top of mind for all consumers during this year’s holiday season.
Supply Chain Management and Logistics Take Center Stage
Look no further than recent pledges made from logistics providers to see the newfound pressure that e-commerce is putting on fulfillment centers across the country. Considering that only 21 percent of consumers are forgiving brands and stores whose service is disrupted by the pandemic, it will be increasingly important for retailers to work in tandem with shippers to mitigate constraints in real time and ensure that the holiday spirit isn’t sacrificed because of newfound supply chain pressures (which we can expect to feel now through January).
This is where collaboration with suppliers is so important. This includes consolidating shipping points, sharing forecasts, and encouraging shipping to hub locations or lockers. Another way that retailers can lessen the strain on the supply chain is by starting promotions early and spreading them throughout November and December. In the case that you cannot meet a consumer’s expectations, ensure that you're as transparent as possible around potential delays or changes.
This holiday season will be unlike any other that the industry has experienced before. The retailers and shippers that can proactively account for increased e-commerce sales, as well as transportation and supply chain logistics, will come out on top of this year’s holiday phenomenon.
The views expressed by the presenters are their own and not necessarily those of Ernst & Young LLP or other members of the global EY organization.
Jeff Orschell is EY Americas’ retail and global account leader. EY provides consulting, assurance, tax and transaction services that help solve its clients' toughest challenges and build a better working world for all.
Related story: The Future of Retail: Beyond the Pandemic