After two years of navigating the pandemic and strained global supply chains, retailers and brands face another uphill battle this holiday season, according to new research from e-commerce solutions firm Radial.
The firm’s new insights study finds consumer spending has become more selective while speedy delivery timeframes are once again top of mind. Yet, pandemic-induced behaviors and blended fulfillment channels remain prevalent and will continue to fuel the customer experience (CX) this season.
“The retail sector has undergone significant unpredictability and digital acceleration over the last two years. Supply chain disruptions and evolving consumer behaviors have shifted a formularized market, into a dynamic one. The impact of inflation introduces a new variable for brands to plan and strategize around this year,” said Laura Ritchey, chief operating officer, EVP, Radial, in a news release. “To ensure peak operations run smoothly, it is essential that brands focus on inventory management and measure against consumer demand. The need for sound omnichannel offerings will ensure customers get a great experience regardless of the channel from which their order is fulfilled.”
Blended fulfillment channels remain integral in the shopping experience
The survey shows that online and in-store are more symbiotic than ever in Americans’ shopping journeys. Nearly half (46 percent) of consumers said they will shop the same amount in store this year compared to 2021, but online seems to be the preferred choice as 58 percent anticipate increasing the use of online shopping this holiday season. Compared to last year’s survey—an 8 percent increase in online shopping plans.
Simultaneously, brands and retailers’ investments in omnichannel models continue to pay off as consumers are holding onto pandemic-favored fulfillment channels like buy online pick-up in-store (BOPIS) and buy online pick-up curbside (BOPAC). One in three consumers anticipate increasing BOPIS usage, and 30 percent say they expect increasing BOPAC when shopping this holiday season.
Gift-giving amid inflation slated for pre-Thanksgiving
While consumer demand continues to move earlier into Q3, the bulk of consumer expenditures will occur in Q4. As of late August, only 12 percent of consumers noted they have begun holiday shopping, this month 18 percent will start. The majority (41 percent) of respondents said they will begin holiday shopping pre-Thanksgiving (October into early November). Notably, based on Radial’s experience, while shoppers have started shopping earlier overall, Black Friday and Cyber Monday are still the busiest days for online ordering across retail categories.
Although 38 percent of consumers noted they will modify the volume of gifts they purchase, 40 percent still plan to buy the same amount of gifts as last year. Research indicates that inflation is curbing gift-giving volumes to some degree, but it has not diminished the gift-giving spirit of shoppers—meaning brands should expect similar consumer demand as previous years.
Consumer expectations around delivery, shipping and CX are increasing
Pre-pandemic behaviors are re-emerging among consumers, particularly around the need for quick delivery. One in three (33 percent) consumers say that the most reasonable timeline for when they expect holiday gifts ordered online to be delivered is two-three days—this is a 10 percent YOY increase. In 2020 research indicated only 14 percent expected their holiday gifts within two days. Referencing the firm’s 2018 consumer findings, over a third (34 percent) of consumers expected to receive packages in two days or less, showing just how much consumers have gone back to pre-pandemic expectations.
Additionally, free shipping remains a top deciding factor when consumers consider making a purchase from a brand online. Demand and interest for new delivery innovations is also growing as 46 percent of consumers said they would select drone delivery if it were available to them in the next year. Underscoring just how interested consumers are to get products as fast and as convenient as possible.
While consumer expectations increase and supply chain and inflation challenges persist, there are lessons to be learned from previous years. The top challenges consumers faced last year were:
- 66 percent of consumers experienced items being out of stock as part of their 2021 shopping experience
- 40 percent noted that last year they did not receive items on time
- 39 percent of respondents noted that items were not available via the channel they wanted to purchase them (i.e., not available in-store, online, or through another pick-up method)
The firm surveyed 1,000 adults across the United States to gather insights around shoppers’ plans and expectations for the 2022 holiday season.