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Shop early and shop often. These words, proclaimed by retailers and analysts well before Black Friday Cyber Monday (BFCM) 2021, were a kind of friendly warning to shoppers for the holiday season.
The combination of factory shutdowns, port closures, labor shortages and spikes in demand all contributed to limited inventory availability and supply chain bottlenecks. These disruptions threatened to derail the 2021 holiday shopping season if inventories did not make it onto store shelves in time. The solution, therefore, was to buy what you can as soon as you can to avoid disappointments.
Now that BFCM 2021 has come and gone, a clearer picture of the 2021 holiday shopping season is beginning to shape. Some of the findings may point to trends that could change the face of holiday shopping in years to come.
Deloitte reported that people were shopping earlier. Seven in 10 consumers (70%) said they started before the end of October (versus 66% last year and 61% in 2019) to avoid stockouts (70% versus 55% last year).
What does this mean for retailers? For one, shoppers are attuned to the macroeconomic environment and are adjusting their behavior. While BFCM is still a popular shopping day, the finding indicates that consumers would rather pay full price/a higher price for an item than risk not having it at all. This seems like a win-win for the retailer — higher margin sales and reduction of markdowns. With additional reports saying that major brands were less promotional and offered fewer or shallower deals during BFCM 2021, it could spell a shift in how retailers approach the BFCMs of the future.
In a recent RIS News article reviewing BFCM 2021, Forrester reported 30% of U.S. online shoppers planned to check online whether an item is in stock before going into the store and the Consumer Technology Association indicated 47% of consumers expect to use technology to check product availability.
Is there anything more annoying than making a trip to a retail store, only to find an empty shelf in the place of an item you wanted? In the post-pandemic world of virus variants, constant hand sanitizing and mask mandates, going to the store isn’t what it used to be. Expect the number of shoppers checking inventory pre-trip to go up in 2022 as shoppers become more e-commerce savvy and risk averse. Not to mention the constant media attention on supply chain disruptions and stockouts, which will no doubt prompt shoppers to check item availability stocks before they hit the store. This is where inventory visibility becomes a must-have for every retailer with a website.
According to Sensormatic, Black Friday weekend shopper traffic increased by 34.2% compared to 2020, showing a progressively favorable outlook for retailers while at the same time shopper traffic data indicates that visits to physical stores during the 2021 Black Friday weekend decreased by -21.7% compared to 2019, the last pre-pandemic year.
So, foot traffic is both up and … down? Correct. Foot traffic is up from Black Friday 2020, but down versus Black Friday 2019. Considering that 2020 was a pandemic year with still a number of unknowns and some mandated shutdowns, while 2021 has seen somewhat of a return to normalcy due to vaccinations, it stands to reason that 2021 should be higher. However, compared to 2019, foot traffic is still down.
When we consider that a segment of consumers shopped BFCM 2021 to ensure product availability (while also being enticed by retailers to do so throughout the month of November) and online spending increased on Black Friday versus 2020 according to Salesforce, we can deduce that the foot traffic sales became/will become online purchases.
What does all of this mean? With foot traffic down but retail spending projected to increase this holiday season, e-commerce continues to take a larger piece of the retail pie. For retailers, it means ensuring a seamless omnichannel experience — having the processes and technology in place to drive customer satisfaction whether it’s online, in store, or both.
Use these BFCM 2021 key findings to help develop your future supply chain strategy. Pandemic or not, the term ‘supply chain’ must be at the forefront of everyone’s thinking and now is the time to harmonize your brick and mortar with your e-commerce business. An omnichannel supply chain strategy will enable you to balance and move your inventory across your fulfillment network to where it’s needed most. The most effective way to accomplish this is with an order management system (OMS) with distributed order management functionality.
Despite the softening of the BFCM 2021 weekend spike, retailers fulfilling orders with Tecsys’ omnichannel order management platform outperformed last year across two key measures: year-over-year order volume increased by 21% and order revenue increased year-over-year by 32%.
E-commerce continues to grow as a percentage of total retail sales right before our very eyes. As we begin to transition into a new year with unknown risks and opportunities, one thing’s for certain: omnichannel fulfillment optimization should be a key strategy for retailers in 2022.