Top 5 Holiday Season Supply Chain Trends to Watch Out in 2020

Holiday Season Supply Chain Trends

2020 has been a tough pill to swallow in more ways than one, but it’s officially the holiday season now. Finally, it is that time of the year to soak in some holiday cheer and have a good time with family and friends. With festivities like Halloween, Thanksgiving, Christmas, and New Year lined up one after the other, customers can gear up for a much-needed shopping spree, and retailers can look forward to a promising holiday season sale. 

Usually, retailers and distributors closely watch the previous year’s festive sale volumes and trends to plan the current year’s sales. But, 2020 is not like any other year. The economic downturn, social distancing prerequisites, and stay-at-home norms could impact this year’s holiday season shopping behavior remarkably. It will therefore be important for retail brands and sellers to understand not just what the consumers will be interested in buying and when, but also where and how they will be shopping.

Here are some festive season trend predictions to help you plan your holiday season sales and last-mile distribution operations effectively, and make the most of the opportunities coming along. 

1. An early and longer shopping season

Retailers in the US are prepping for an earlier and longer holiday season sale this year. Amazon kicked off Prime Day sales on 13-14 October, offering great deals on holiday merchandise. In the same week, Best Buy announced dozens of great deals, and Walmart launched an online-only Big Save Event two days before Prime Day through October 15. Target Deal Days kicked off in the same week too, with discounts across electronics, home appliances, and toys along with “Black Friday pricing all November long.” 

This indicates that the competition in holiday season selling is intense this year, and customers have started shopping for gifts and holiday goodies much earlier compared to the previous years and will continue to do so until mid of December.

2. E-Commerce will continue to soar

Coronavirus is still around and people are still hesitant to visit retail outlets for holiday season shopping in order to maintain social distancing. The online shopping trends that have emerged this year will continue to prevail during the holiday season as well. A survey conducted by Redpoint Global reveals that nearly two-thirds of the 1,000 adult shoppers surveyed — 62% planned to do all their holiday shopping online. 

According to Forrester, online sales for retailers in popular gifting categories will get a boost this season, with health and beauty up 23%, consumer electronics rising 20%, fashion up 19%, and home furnishings growing 16% by year’s end. On the other hand, in-store retail performance in these categories will drop – health and beauty offline sales down 8.2%, home furnishings off 15.2%, consumer electronics down 26.3%, and in-store fashion sales off by 33.7%. This is pushing brick-and-mortar retailers to utilize their digital capabilities and implement stronger online and omnichannel selling strategies.

3. Retailers will have to offer omnichannel delivery options 

That being stated, it doesn’t necessarily mean that offline retail will be completely obsolete. Although customers are less likely to frequent stores for shopping, sellers can use their stores as fulfillment centers. Retail brands, E-commerce sellers, and Direct-to-Consumer sellers will have to play around with delivery and distribution methods, offering not just doorstep delivery services, but other convenient options such as Buy Online Pick-Up in Store and curbside delivery. 

Nearly 67% of shoppers in the US have used Buy Online Pick Up In-Store services since the COVID-19 outbreak and consider it as a safe and time-saving delivery option. According to a Statista report, around half of American shoppers surveyed in August 2020 said they were planning to use curbside/contactless pickup during holiday season shopping in 2020 more than they did the year before. Click-and-collect sales are also expected to grow by more than 50% as shoppers are likely to use the service throughout the holiday season.

4. Speed and safety will take the center stage

With E-commerce and retail competition intensifying in the holiday season, the speed of last-mile operations will eventually differentiate the best brands from the ordinary ones. Customer satisfaction will be determined by not just express deliveries — one day, two day or same-day deliveries, but also safe and hygienic contactless deliveries. 2020’s holiday season will be one of the busiest ever peak seasons for retailers. Delivery speed will be extremely crucial, as 97% of consumers said speed is at least somewhat crucial in determining whether they will purchase a product, with 40% saying it is very important. Nearly half — 46% of consumers expect companies to deliver faster than they did a year ago.

Customer expectations of faster and more professional deliveries suggest that last-mile logistics will have to be more efficient and smarter. Retailers and e-commerce companies will have to adopt technology such as last-mile routing, dispatching software, and dynamic delivery planning software to reach customers faster, plan daily dispatches more effectively, and accommodate last-minute orders or returns more efficiently.

5. Last-mile visibility will gain more importance

While last-mile visibility in e-commerce has always been important, it is even more crucial this year, as most of the holiday sales will be carried out online. As a result, customers will expect greater transparency and would like to have clear details about every order — the shipping date, expected date and time of delivery, transit information, details of the delivery agent carrying their parcel, including their temperature and health status at the time of delivery. 

The use of last-mile tracking solutions can help retailers share such important information with their customers, bringing in more trust and transparency in the holiday supply chain. It can also empower logistics managers to closely monitor on-ground activities, and ensure that riders and delivery agents are on-time and performing as per the schedule.

The Bottom Line

2020’s holiday season may not be the same as every other year, due to social distancing and stay-at-home celebrations. However, it certainly looks like a longer, more explosive online shopping season for customers. The competition in the retail space is high, and so are the customer expectations for fast, efficient, and transparent order fulfillment. Strategic planning and the right use of logistics tech can help businesses deal with the peak season sales effortlessly and achieve greater success by the end of the year.

Locus offers best-in-class AI-led logistics solutions for efficient logistics planning and last-mile fulfillment. Get in touch with our experts for a quick tour of our services.

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