Retail Holiday Shopping Peak Season Circa 2020
The numbers are in and despite the current climate our country finds itself in, consumer’s appetite for holiday shopping is bigger than ever despite recent consumer trends. According to the U.S. Department of Commerce, consumer retail spending rebounded from the original drop at the onset of the pandemic of 8.3% followed by 16.4% in April. Around the time of back to school shopping, spending climbed back up 1.9%.
The past year has been a testament to the strength and resilience of the supply chain. More specifically, the retail supply chain. Today, retail sales have fully recovered. While consumers do their part, suppliers are working hard to forecast consumer demand and adapt their inventory accordingly to further plan their logistics and fulfillment.
According to a report by Adobe Analytics, U.S. online sales during the months of November and December of 2020 will set a sales record by reaching $189 billion. This estimate is a 33% increase in years prior and represents two years of growth in just one season in comparison to 2019’s 13% increase.
If you are surprised to see consumers move online, then you are late to the party. On behalf of the entire retail world, this transition has been highly anticipated and predicted. The pandemic accelerated the digital conversion of customers and the retail industry at large has been preparing. However, the surge in demand has created new obstacles for retail suppliers.
Retailers are facing new challenges to keep their customers satisfied. According to a survey by Supply & Demand Chain Executive magazine, many companies have reported their difficulties to fill orders on a consistent basis. In addition, many suppliers are fearful to fall off pace of 98% on-time delivery targets -- slumping to an 80% range.
Because of these unusual circumstances, retailers are exercising control where they can by focusing on preserving the supply chain’s reliability, quality, and order experience and asking that consumers place their orders ahead of time.
With consumers shopping online, package delivery rates will go up. UPS and USPS have announced holidays surcharges. Shipping costs will go up and there will be a freight premium. Logistics will also be affected as manufacturing turnaround slows down. Deliveries are expected to take twice as long as usual and orders may be coming from stores with excess inventory as opposed to warehouses or distribution centers.
Given the current supply chain strain and added pressure during the peak retail season, savvy retailers are stretching out the holiday season to adapt to the current landscape and combat uncertainty. While the gift shopping experience may look a little different this year, the holiday shopping cheer will remain.