Retailers face headwinds weeks out from holiday shopping. One solution: Flexe Logistics Programs.
Key Takeaways
- Inflation and economic concerns threaten to slow seasonal growth year-over-year. Deloitte estimates growth between 4% and 6% in 2022, compared to 15.1% during 2021’s peak season
- 43% of consumers claim they plan to spend less this holiday season. 85% claim inflation changed their shopping habits
- Consumers expect both great in-store and online fulfillment. And successful fulfillment strategies require supply chain flexibility to deliver purchases when and where customers want them
- Retailers and brands find ways to access urgent capacity and expand distribution and fulfillment networks. One answer: Flexe Logistics Programs. The result: Scalable, dynamic logistics networks designed to meet customer expectations—in-store and beyond
Retailers and brands continue to battle excess inventories #
Through 2021 and early 2022, retailers and brands increased inventory levels amid supply chain challenges and shifting consumer demand. Many now battle excess inventories after slow summer sales. They attempt to right-size stock while competing for more consumers’ dollars.
Consumers bargain hunt as inflation worries increase
#
Inflation and economic concerns threaten to slow seasonal growth year-over-year. Deloitte estimates sales growth between 4% and 6% in 2022, compared to 15.1% during 2021’s peak season.
Many retailers face weaker holiday sales, and 43% of consumers claim they plan to spend less this holiday season. Eighty-five percent claim inflation changed their shopping habits.
When they do spend—in-store or online—consumers crave bargains. Sixty-five percent of consumers claim price drives purchases this year.
Many retailers face weaker holiday sales, and 43% of consumers claim they plan to spend less this holiday season. Eighty-five percent claim inflation changed their shopping habits.
Retailers extend peak shopping demand #
Retailers capitalize with early online sales, offsetting traditional Black Friday / Cyber Monday shopping. And fifty-seven percent of consumers plan to shop earlier to take advantage of pre-holiday deals.
Amazon: Amazon launched its second “Prime Early Access Sale” on October 11 and 12.
Kohl’s: Kohl’s started early holiday promotions on October 6 with additional shopper rewards through Cyber Monday and Christmas Eve.
Target: Target kicked off October with early shopping deals through the week of Thanksgiving—three weeks earlier than 2021.
Walmart: Walmart launched its “Rollbacks and More” October savings event from October 10-13 with discounts on electronics, home goods, clothing and toys. It plans for multiple November shopping events—both online and in-store.
Retailers extended peak shopping partially to reduce inventory gluts. But sales results may be mixed. Results for Amazon’s second “Prime Early Access Sale” indicated shoppers stopped short on big-ticket items as inflation worries grew. Fifty-eight percent of items purchased in the early hours of the sale cost less than $20.
Meanwhile, consumers watch their wallets but still expect great experiences, both in-store and online.
Customers return to brick-and-mortar and leverage in-store fulfillment #
Forty-six percent of consumers plan to holiday shop in stores. And customers expect in-store fulfillment.
In-store fulfillment, or “buy online, pickup in store” (BOPIS), boosts eCommerce orders and additional in-store purchases.
Eighty-five percent of shoppers make additional unplanned in-store purchases when picking up online orders.
And 42% of shoppers abandon shopping online if shipping options are limited or in-store fulfillment is unavailable.
Leading retail giants plan accordingly:
Target already fulfills approximately 95% of its eCommerce order in its stores. With Black Friday approaching, it offers in-store fulfillment two hours after ordering.
Walmart offers in-store fulfillment options across its November sales events and store locations.
Kohl’s expanded self-pickup to all locations in August for the holidays.
A BOPIS strategy requires balancing in-store inventory with inventory in regional distribution centers. Stores can restock quickly through local distribution networks.
The challenge: Placing the right inventory in the right locations at the right time. Supply chain logjams mean stockouts, and stockouts cause lost sales and unhappy customers.
Strong delivery promises win online customers #
Shoppers return to stores often this peak season, but they still search for bargains online. And they expect strong delivery promises.
Thirty-three percent of consumers want holiday gifts delivered in three days or less.
Seventy-six percent of consumers say free shipping is important, and 55% say the same about fast shipping.
Eighty-three percent of consumers switch retailers for faster delivery. And 72% of consumers skip repeat purchases due to late deliveries.
Retail giants develop strong delivery promises to capitalize on online shopping.
Target offers same-day delivery via Shipt for Black Friday deals.
Walmart introduced its November sales events with two-hour delivery, next-day delivery and two-day delivery on online orders.
Consistent, fast eCommerce delivery requires optimized supply chain networks. But adding fulfillment nodes is costly. Rent rates continue to spike. The industrial vacancy rate dipped to 2.9% in Q3 2022. Costs lept to $9.54 per square foot—a 12.8% increase over Q3 2021.
The industrial vacancy rate dipped to 2.9% in Q3 2022. Costs lept to $9.54 per square foot—a 12.8% increase over Q3 2021.
Flexible logistics provide a strategic advantage
#
Successful holiday sales strategies require supply chain flexibility so customers can purchase goods when and where they want. But traditional supply chains are not designed for speed and flexibility.
Leading retailers and brands find ways to access urgent capacity and expand distribution and fulfillment networks. One answer: Flexe Logistics Programs. The result: Scalable, dynamic logistics networks designed to meet customer expectations—in-store and beyond.
Boost warehouse capacity for surplus inventories #
Organizations manage surplus inventories and overcome the capacity crisis with the Flexe Dynamic Capacity Program. Retailers and brands find critical warehousing through North America’s largest logistics network—often at lower costs and with no term commitments.
Drive in-store fulfillment, stop stockouts and maximize sales #
When retailers leverage in-store fulfillment, they often reassess their distribution networks, adding nodes and placing fast-moving inventory close to stores. One alternative creates distribution flexibility without slowing retailers down: The Flexe Rapid Replenishment Program.
A Rapid Replenishment Program drives inventory replenishment within 24 hours via regional distribution hubs. All while prioritizing speed, flexibility and visibility across the network.
Leading retailers utilize Rapid Replenishment Programs and avoid stockouts, improve customer experiences and increase sales—online and in-store.
Global Coffee Company Tackles Peak with Flexe Rapid Replenishment Program
Expand eCommerce delivery promises in time for the holidays #
Customers expect fast eCommerce delivery, especially with the holidays approaching. But speed is costly: Forty-five percent of brands don’t offer fast shipping options because it makes total costs too high. And shipping success depends on locating inventory near customer locations.
Leading retailers and brands respond to customer demands, run effective promotions, improve delivery speed and accelerate growth with the Flexe Dynamic Fulfillment Program. All without CapEx investments, fixed costs or long-term commitments.
Seasonal shopping traditions fade, but retailers and brands can still win customers #
Holiday shopping once meant crowded stores from Black Friday through Christmas Eve. Now, peak shopping extends into early Q4, with many shoppers expecting deals and inspiring finds far ahead of the holidays.
Consumers want the flexibility to shop in-stores and online, placing purchases wherever they want. And they expect fast and free delivery promises.
Leading retailers and brands recognize consumer demand shifts and adapt accordingly. Investments in short and long-term logistics flexibility pave the way for strong sales and happy customers.
You might also be interested in: #
