Pumpkin Pies, Christmas Lights, and Empty Shelves? This Holiday Season Will Be Anything but Traditional for Retailers

MakersValley Blog | Pumpkin Pies, Christmas Lights, and Empty Shelves? This Holiday Season Will Be Anything but Traditional for Retailers
Tashfia Parvez

Tashfia Parvez

The holiday season is the most wonderful time of the year for most retailers, but in 2020, things will look different. This coming season, retailers will likely suffer

  • Delayed shipped orders 
  • Slower inventory turnaround
  • Lack of merchandise 
  • Lowered consumer purchasing power
  • Decreased store traffic
  • Fall in overall sales volume

Should this lead to complete despair? Not necessarily. This simply opens a greater opportunity for resilience, creativity, and restorative action.

The slow-moving supply chain will lead to less available stock

The fashion supply chain has been disrupted for months now. The spread of the global pandemic halted production in several factories overseas and delayed shipping. In some cases, retailers have had to cancel orders as stores across the country temporarily closed doors or completely shut down. This has caused a shortage of supplies and products that will potentially continue into the holidays.

MakersValley Blog | disrupted supply chain | delayed shipped orders | lack of merchandise

Photo by Burgess Milner on Unsplash

Empty shelves in stores are never a good look, so companies like Tapestry Inc. are planning to make existing inventory last longer by stretching out new merchandise releases, which means less newness to win over shoppers, according to Business of Fashion.

Backed up orders and international lockdowns also led to slower product shipping earlier this year. 47% of online shoppers experienced both out-of-stocks and shipping delays.

Waiting for orders to arrive during the holiday season can frustrate consumers, forcing them to shop unplanned alternatives. One way to entice these customers to shop your label is to offer free shipping. In fact, a survey carried out by Digital Commerce 360 found that 70% of online purchases (non-Amazon) included free shipping. Other perks that consumers love from e-commerce (besides faster delivery) are fewer targeted ads and more detailed product information.

Consumers can’t afford to shop, so they will look for more sales

Fitch predicts that apparel sales will fall 5 to 10 percent from 2019, this holiday shopping season. A big contributor to this is consumers’ changing shopping patterns.

Millions of furloughs and layoffs have limited consumers’ purchasing power. Shoppers were already more inclined to greater savings before the pandemic began, and with the loss of jobs they are now learning to live more minimalistic lives. “Even with essential retailers like Walmart Inc. and Home Depot Inc. remaining open, US store visits fell 98 percent in April, according to Prodco” (Business of Fashion).

This indicates another big emerging trend this holiday season – widespread markdowns and promotions. Black Friday and Cyber Monday deals will be extended over a longer period of time as consumers on a budget scramble to find the best deals. Consumers that have been financially stable and not lost their jobs over the last few months might show little to no change when it comes to buying, but they will have concerns about safety and social distancing measures.

MakersValley Blog | consumer low demand | sourcing | digital supply chain

Photo by Toa Heftiba on Unsplash

Retailers will have to leverage merchandising and marketing strategies if they want to generate higher foot traffic and decrease the number of returns for online purchases. They can increase engagement with shoppers by offering curbside or in-store product pickup, simpler and more spacious floor layouts for easier navigation and social distancing, and appointment booking for more intimate and curated sales practices.

What else retailers can do in terms of sourcing

Retailers can also improve their sourcing practices by diversifying their vendor partners. Because so many retailers had to ask their factories and manufacturing mills to halt order production, a trade dip has taken place between the U.S. and manufacturing countries like China. Exploring countries like Italy or others in the European region opens up possibilities to form new supplier relationships that could reduce the risk for supply chain disruption.

Finally, it’s also crucial for retailers at this time to “leverage critical technologies to provide updates in real time. A multi-enterprise solution enables each stakeholder to connect seamlessly on a single platform”, (as Sue Welch writes in Forbes). Collaborating on a central digital platform will help create great transparency between retailers and suppliers, which will then create greater transparency between retailers and consumers.

Ultimately, there is no sure fire way to predict the 2020 holiday season. It will differ deeply from 2019 though, when unemployment was low and the economy was booming. This year, retailers will need to exercise caution while stocking shelves and setting prices, have realistic expectations, and be flexible and well-prepared to address consumer in-store shopping concerns and merchandise promotion incentives.

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