Supply chain crisis: How it affects holiday shopping

High demand, combined with supply chain delays, material shortages and problems in hiring workers, reduces the availability of goods both online and in stores. As customers get closer to the last minute, physical stores will become a more appealing option for shoppers than waiting for delivery, analysts expect.

Although customers can not find exactly what they are looking for in a store, it is usually easier to search around for an alternative in person – and they can try it.

“Muds and mortar may be more attractive to consumers later in the season,” Rod Sides, vice president of Deloitte and head of its U.S. retail and distribution practices, said in an email. “Shoppers can leave with goods in hand, instead of waiting for promised dates from shippers.”

Consumers saw more than 2 billion sold-out messages while surfing online in October, according to Adobe Analytics. This is a big reason why sales in physical stores will increase by 8% this year – a 10-year high – as shoppers return to personal shopping and try to avoid shipping delays, according to property analysis firm CBRE.

Analysts also believe that online shopping, pickup in store orders will boom this holiday due to shipping issues.

Shoppers will lean on pick-up at the curb “more than ever to give them peace of mind about their holiday shopping” with waiting times and out-of-stock items high on consumers’ minds, said Andrew Lipsman, a retail analyst at market research firm Insider Intelligence .

Retailers will greatly promote pickup as an option for customers on their websites and mobile apps, in marketing emails and on TV to appeal to customers who are nervous about buying online late in the season, Lipsman expects.

Stores say they have more control over inventory in stores and through pickup next door than they do with home delivery orders – meaning they are less likely to make a mistake or delay an order.

“The closer I got [to the holiday]”I would definitely use the ship to store because it will give me more confidence to be able to actually get things done on time,” said Ben Johns, general merchandising manager for action sports at the outdoor equipment retailer REI, in a recent interview.

When customers order online and pick up their goods in stores, products are either already in the store, or REI sends them from one of its department stores using its own trucks. This means that REI does not have to rely on third-party vendors it has less control over delivering to customers’ homes, he said.

$ 5 discount on orders and free blankets

Retailers have an incentive to draw customers into their stores.

It is typically more profitable for retailers to get you to shop in person than to order a home for you because they have to pay expensive last mile delivery costs. Return prices are also higher for items purchased online, and retailers have to pay for customers’ returns.

Top retailers are pushing customers this year to visit their physical stores to shop or order online and pick up their items in person.

Kohls (KSS) offers customers a $ 5 discount on orders when they pick them up in stores. It also tries to make the pick-up process easier for customers by adding temporary new pick-up locations and designating more parking spaces for pick-up, as well as a self-pick-up test where customers can access their orders using a link and a code.

Kohl’s expects increased demand for pickup orders this year, in part because it “eliminates the extra stress of waiting for packages to arrive right outside the door,” said Paul Gaffney, Kohl’s chief technology officer and supply chain manager, in an email.

How to find lower prices and avoid empty shelves during the Christmas shopping rush
Carters (SHOUT), the children’s clothing chain, offers customers gifts as an added benefit if they buy items on specific days in stores – but not online – such as blankets from November 19 to November 21 and a Skip Hop toy from December 10 to December 12.

Randa Apparel & Accessories, which sells brands like Levi’s, Tommy Hilfiger, Calvin Klein and others, has shifted a large portion of its advertising spending to push customers to stores instead of buying online. It also directs more of its inventory to stores than e-commerce.

“When inventory is limited, we prefer to drive consumers to in-store purchases over online purchases,” said David Katz, Randa’s chief marketing officer.

Customers who buy products in the stores are more profitable for Randa than online sales, which often come with “very large reverse logistics costs” on return orders. “We paid for the tuition for this training and it was an expensive lesson to learn,” he said.

When shoppers enter stores, they also tend to make impulse purchases or buy related items nearby – for example, belts near the pants they buy. This happens less often when you shop online.

In general, Katz said, “the level of frustration is lower when you go for mortar and mortar, especially when inventory is limited.”

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