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Get Ready for a Holiday Shopping Season Like No Other

normanrockwellHoliday Shopping in the Time of COVID

Who would have thought we’d still be having this conversation about COVID-19 in September, let alone planning for the first holiday-shopping-during-a-pandemic season in living memory? And yet, here we are — and smart retailers are already thinking about December. They’re hard at work adapting sales and marketing strategies to deliver a merry gift-giving season at the end of a stressful year unlike any other. 

Store managers and consumers have already made significant adjustments to pre-pandemic behaviors — everyone has changed how they shop, specifically the way they find new products, compare options, and finally, make a purchase. It remains to be seen how merchants will deliver the “old” holiday shopping experience in the time of COVID.

Online Everything

Motivated buyers are nothing if not adaptable. In fact, a rapid shift from brick-and-mortar channels to online shopping was probably the only thing that was predictable in these unpredictable times. E-commerce spending in the U.S. grew by an estimated $53 billion in additional sales year-over-year. That’s 93% from May 2019 to May 2020. There was also a massive move away from cash and towards mobile and contactless payment methods. “Globally, almost seven in ten consumers say the shift to digital payments will likely be permanent,” according to a recent survey by Mastercard. 

According to eMarketer, e-commerce spending increased by 18% so far in 2020, and brick-and-mortar is expected to decrease by 14% by the end of the year. Yet the fundamentals of buying and selling are still the same: consumers want goods and services and retailers want customers.  When they find each other, and when everyone thinks they’re getting the best products for the best prices, everyone leaves happy.

Right now, we’re all craving a little bit of that retail normalcy. A holiday season with all the trimmings might be just the respite many of us need. And now that it’s clear we’re willing to change the way we shop, planning for “holiday commerce 2020” will focus on how to recreate personal and authentic offline shopping experiences in an online world.

E-commerce Requires Three Times the Logistics Space of Traditional Storefronts

While merchandisers focus on what to stock and how to design enticing holiday promotions for people who can’t travel, can’t socialize, and don’t want to go into stores, retail operations managers are looking at everything that happens downstream after a sale. Creative marketing brings the customers in, but impeccable fulfillment brings them back.

A new report from Prologis, a global leader in logistics real estate, says we should expect to see greater investments in well-located warehouse space in the coming months because e-commerce requires three times the logistics space of traditional storefronts. "Online order fulfillment requires more logistics space because 100% of inventory is stored within a warehouse (vs. store shelves), which allows for greater product variety, deeper inventory levels, space-intensive parcel shipping operations, and additional value-add activities such as processing returns," the report reads.

Earlier this year, cosmetics giant Sephora was already gearing up for its popular Spring sale when the pandemic hit. The annual event typically takes months of preparation to handle a barrage of online orders in a short period of time.

Realizing their digital fulfillment had to switch from a manageable promotional uptick to “always-on” mode due to the pandemic, Mike Racer, Sephora’s SVP of Supply Chain, noted that investments in network design and inventory management helped the brand fill orders despite delivery delays created by COVID-19.  “We certainly were able to meet the business needs in a way that clients appreciated, and we gained market share as a result, which is great," he said. “Our ability to get stuff out, get it out quickly, and get it out accurately has been a game-changer.”

Getting Used to Uncertainty in Store Management

Theodore Roosevelt once said, “In any moment of decision, the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do is nothing.”

In other words, in uncertain times you need to take a hard look at how you’ve always run your business and decide whether that’s good enough for the challenges that lie ahead.  The good news is that companies that figure out what to change in their business model, and how to change it, can actually come out stronger than they were before.

Emarketer.com forecasts the majority of the top 10 e-commerce marketers will increase their market share during the pandemic “as consumers shift toward essential goods retailers that provide reliable delivery and click-and-collect fulfillment.”  Traditional retailers who take a lesson from the e-commerce giants and retool how they manage and distribute inventory will be better positioned to survive the pandemic and have a successful holiday shopping season.

 Cura Group helps retailers navigate the challenges of distribution obstacles and changing consumer demand by building and managing local distribution centers strategically placed in high-volume markets. Our turnkey sales centers provide a convenient pick-up option for customers and stock fast-moving inventory for quick delivery. 

If you need help with last-mile logistics, curbside pickup solutions, or even bi-lingual customer service to fulfill direct sales or direct-to-customer orders, please contact us to find out how we can transform the way you deliver in time for the holidays.


Topics: holiday shopping e-commerce shopping local sales centers Covid-19