Retail remains in a precarious state as it emerges from the post-COVID-19 wave. The pandemic has seen many companies gravitate online. While this has brought benefits for many, the web has become crowded for many.
A new survey reveals that 60 percent of online operating merchants predict higher than pre-pandemic holiday sales. However, this is countered by a lack of inventory and other supply chain concerns. The research comes from Ware2Go, a UPS company.
The findings also reveal that ‘peak’ is the new normal. This is in the sense that the pandemic-fueled ecommerce boom and ongoing supply chain issues have led most merchants to prepare as much as six-months ahead of the holiday season.
This is borne out by 44 percent of merchants reporting that as of September 2021, they are already in peak season. More telling, 13.8 percent report that their peak season started during or before the month of August. As things stand, 63.2 percent of merchants ordered holiday inventory in July or earlier and 44.4 percent ordered more inventory than normal.
In terms of developing marketing strategies, the poll also finds that discounts are not shopper’s top motivator. For 2011, instead of focusing on shopping holidays such as Black Friday and Cyber Monday, consumers will be focused on getting their gifts in time.
How prepared are retailers for this? The data indicates that 75.5 percent of merchants are intending to offer one-and-two-day shipping options and where 23.8 percent of which only offer this incentive for the holidays. As a marketing strategy, 54 percent of merchants indicated they intend to specifically incorporate free one-and-two-day shipping details into their holiday advertising.
The overall lesson that can be drawn from the research is that merchants must stay adaptive to navigate supply chain challenges. While some of last year’s supply chain issues still apply like warehouse capacity shortages, there are other key differences. For 2011, port and rail congestion are the underlying problem to inventory shortages.
The extent of this is borne out in the finding that 46.4 percent of those surveyed report that running out of inventory is their top fulfilment concern. In addition, other top concerns include labor shortages (at 45.6 percent) and longer than usual lead times (mentioned by 36 percent of respondents). With this latter point, the average wait time to unload a cargo ship in Southern California now exceeds eight days.
It also remains that in spite of ordering inventory earlier than usual 19 percent of online retailers say they are unsure if their inventory will arrive in time for peak season.
There are lessons that online companies can learn from the research, if not for what remains of 2021, at least for the following year.
