Supply chain crisis: its impact on holiday shopping
Even if customers can’t find exactly what they’re looking for in a store, it’s usually easier to research an alternative in person – and they can try it.
âBrick and mortar may be more appealing to consumers later in the season,â said Rod Sides, vice president of Deloitte and head of its US retail and distribution practice, in a th -mail. “Buyers can leave with the goods in hand, instead of waiting for the dates promised by the shippers.”
Consumers saw more than 2 billion out-of-stock messages while browsing online in October, according to Adobe Analytics. This is one of the main reasons why, in physical stores, sales will increase by 8% this year – a 10-year high – as shoppers return to in-person purchases and try to avoid delays in sales. shipping, according to real estate research firm CBRE.
Analysts also believe online shopping and in-store order pickup will explode this holiday due to shipping issues.
Shoppers will rely more than ever on curbside pickup “to give them peace of mind about their vacation shopping” with wait times and out-of-stock items in the minds of consumers, said Andrew Lipsman, retail analyst at market research firm Insider Intelligence.
Retailers will heavily promote pickup as an option for customers on their websites and mobile apps, in marketing emails and on television to attract shoppers keen to buy online at the end of the season, Lipsman expects. .
Stores say they have more control over in-store inventory and curbside pickup than door-to-door orders, which means there’s less chance of an error. or a delay on an order.
“The closer I got [to the holiday], I would absolutely use the ship for storage because that will give more confidence that I can get the thing on time, âsaid Ben Johns, general manager of action sports merchandising at the equipment retailer outdoor REI, in a recent interview.
When customers order online and collect their items from stores, the products are already in the store or REI ships them from one of its warehouses using its own trucks. This means that REI does not need to rely on third party carriers. he has less control over delivery to customers’ homes, he said.
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Retailers have an incentive to attract shoppers to their stores.
It is generally more cost effective for retailers to have you buy in person than to order from your doorstep because they have to pay high last mile delivery charges. Return rates are also higher for items purchased online, and retailers must bear the cost of customer returns.
Top retailers are pushing customers this year to visit their physical stores to buy or order online and pick up their items in person.
Kohl’s expects demand for pickup orders to increase this year, in part because it “eliminates the added stress of waiting for packages to arrive at your doorstep,” said Paul Gaffney, chief technology officer and manager. Kohl’s supply chain, in an email.
Randa Apparel & Accessories, which sells brands such as Levi’s, Tommy Hilfiger, Calvin Klein and others, has shifted a large chunk of its ad spending to push customers to stores, instead of shopping online. It also directs more of its inventory to stores than to e-commerce.
âWhen inventory is limited, we prefer to encourage consumers to buy in-store rather than buy online,â said David Katz, Randa Marketing Director.
Customers who buy products in-store are more profitable for Randa than online sales, which often carry âvery large reverse logistics costsâ on return orders. âWe paid the tuition for this education, and it was an expensive lesson to learn,â he said.
When shoppers enter stores, they also tend to make impulse purchases or purchase related items nearby – belts, for example, near the pants they are buying. This happens less frequently when shopping online.
Overall, Katz said, “the frustration level is lower when using mortar and brick, especially when stocks are tight.”