Planning for peak this year could be even harder with cash-strapped shoppers holding on to their pennies until the last minute. GXO’s Tony Mannix asks what it could mean for retailers this Christmas
During last year’s holiday season, many of the UK’s retailers were primarily concerned with reducing pandemic-related inventory backlogs and meeting demand driven by consumers’ pent-up savings.
Twelve months later, retailers are facing a different landscape altogether; with rising interest rates, inflation and other economic pressures, there is talk of a more muted holiday shopping season.
However, a recent Barclays report states that inflationary pressures notwithstanding, consumers are still willing to spend on non-essentials and luxuries, while a Kantar survey found that adults’ propensity to increase spending around Christmas remains buoyant.
“Teams and capacities will be tested to the last minute, yet deliveries cannot be delayed because customer expectations of speedy fulfilment remain”
At the very least, consumers are likely to defer expenditure until the last minute. PwC research notes: “Aware that a pre-season of holiday deals is increasingly becoming the norm, [customers] are biding their time.”
So, what are the implications for retailers of this trend towards last-minute purchasing?
Perhaps the most obvious is that the holiday season will be busy and customer appetites will remain high. This is good news – but challenging for retailers planning for peak.
Teams and capacities will be tested to the last minute, yet deliveries cannot be delayed because customer expectations of speedy fulfilment remain.
Add to this the potential for carriers to cap deliveries to avoid the chaos of 2022 and retailers are left in a difficult position.
“Retailers cannot enter this year’s holiday season with last year’s tools and tactics”
Either stretch teams and resources beyond their limits but risk jeopardising operations in the long term, or work at normal capacity but risk not fulfilling Christmas orders on time.
It’s in instances like this that retailers turn to logistics partners for seamless support during the holiday shopping season and beyond.
A more compressed peak holiday shopping season is a challenge that – with the right preparation and logistics partner – can be turned into a great opportunity.
Retailers cannot enter this year’s holiday season with last year’s tools and tactics – agility and adaptation are key. GXO can help its clients to achieve this agility and fully meet unpredictable consumer demand.
Last minute solutions
GXO offers a premier click and collect solution, Clicklink®, which bridges retailers’ online ecosystems with their brick-and-mortar presence. A customer can order last-minute gifts on December 23 and collect them in store the following day, just in time for Christmas. The delivery network can carry out daily stock drops into key stores and retailers’ orders can be batched together for more efficient and cost-effective delivery.
Meanwhile, GXO’s shared warehousing solution GXO Direct enables retailers to tap into resources that can be scaled up or down with demand. Thanks to fast, cost-effective deployment, GXO Direct offers retailers much needed flexibility – ramping up to meet the last-minute purchasing peak ahead of Christmas, then switching gears for the high returns period in the new year.
Tony Mannix is strategic advisor – retail logistics at GXO.