4 ways to prepare for an uncertain holiday season

By Mark Delaney. Vice President, Industrial Strategy, Retail & Consumer Goods at FourKites.

For retailers, the pandemic has caused a difficult shift to manage. Consumer spending gave up services in favor of goods, online commerce dominated the once-reliable brick-and-mortar shopping seasons, and shopper loyalty waned as they chased product availability, forcing retailers to catch up.

Now retailers face a new challenge: inflation. Rising prices for groceries, gasoline and other staples are forcing retailers to respond to consumers who are feeling newly squeezed.

This creates an uncertain fate for the Christmas shopping season, the busiest time of the year for retailers. According to a recent survey, more than half of consumers say inflation is causing stress when buying gifts this season, and three-quarters say they are paying close attention to their spending.

There are already signs that their fear is for good reason. This year’s forecast for the season is muted: Growth over last season is expected to be between 1% and 3%, below the 10-year average. This is in contrast to last year’s buoyant shopping season, when sales rose 14% year-on-year.

For obvious reasons, consumers are being driven by rebates, but that could be difficult this year as retailers tighten their belts amid falling sales, labor shortages and supply chain disruptions. For retailers, investing their money in long-term solutions to maintain momentum before, during and after the shopping season, no matter the year, is probably the best way to go. Here are four ways they can do just that.

  • Meet clients early in the season. Shifting excess inventory and attracting holiday shoppers may mean breaking with tradition and marketing Black Friday deals today, rather than the ‘official’ start of the season at the end of November. Inventory may not be an issue for plastic goods, but for items from Asia, such as clothing or electronics, it would be a good idea to stock up now to meet demand later.
  • Free your team to focus on customer service. Consumers always want helpful, friendly service from sellers who are experts in their fields. Shoppers need advice, information and solutions – and retailers have the advantage of being the only place where consumers can touch, smell, taste or try on the product.

    But hiring staff, let alone experienced and knowledgeable ones, remains a challenge. To ease work constraints, retailers can use technology and automation to complete trivial tasks so their teams can do what they do best—help customers. A major benefit of using real-time supply chain visibility is knowing the status of your inventory and when stockouts will be replenished. For example, by working with FourKites to make its deliveries more visible in transit, PetSmart was able to identify the root cause of business disruptions and minimize their impact on employee productivity. And by empowering employees with information, you can increase employee retention – employees want to be helpful, better insights enable that.

  • Deliver a hybrid experience. Shoppers want choice and flexibility – stores should strive to provide a seamless in-person and online shopping experience. Ideally, shoppers can pull up, quickly pick up items ordered online, and then walk in to purchase items that aren’t ideal for online shopping: groceries, shoes, or fitted clothing. While it may not be realistic for every store to adopt this model, it is possible to come close by beautifying the front of the store or ensuring your curbside service doesn’t take a beating.

    Retail spaces can also be repurposed to focus more on the tangible benefits of shopping; When it comes to purchasing, retailers can make it easy to pull a card and choose a delivery option. The establishment of showrooms in brick-and-mortar locations will improve the shopping experience and potentially spark excitement in those who have lost their way since the pandemic.

  • Know your inventory. As previously mentioned, traditional seasonal shopping benchmarks like Amazon Prime Day and Black Friday have lost their luster. This changes the patterns of this season. Instead of focusing on those two dates, retailers now have the option to spread their promotions across a broader time window. Discounting should be based on available inventory, which requires greater visibility.

    Labor strikes, weather events and more can temporarily disrupt the flow of goods. Combined with unpredictable consumer demand, stores can quickly find themselves faced with unexpected shortages or excess inventory. Accurate estimated arrival times and end-to-end visibility from manufacturer to distribution centers and beyond enable store managers to appropriately manage promotional strategies and customer expectations.

While it’s difficult to predict what the holiday shopping season will bring, it’s safe to assume that shoppers will be looking for deals, flexibility and service. And with more uncertainty in 2023, those preferences are likely to remain. Retailers taking action to exceed expectations will have happy holidays and a prosperous New Year.

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