Last year’s holiday season was unlike any we’ve seen before. Long lines on Black Friday were replaced with weekly online deals beginning in October. Concerns over stores running out of the season’s hottest products were replaced with out-of-stock notifications or seriously elongated shipping times for online purchases.
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Simply put – the way retailers and consumers went about shopping during the holidays fundamentally changed during the pandemic.
All the change that happened during last year’s holiday season will have a residual effect on an even busier 2021 season – Mastercard predicts holiday retail sales will rise 7.4% from last year – as the world continues to contend with COVID-19 and consumer behavior shifts.
As eCommerce continues to be a preferred channel for consumers, there will be a heavy emphasis on shipping again this holiday season.
With more sales taking place online, getting packages to customers will be a top priority, and ensuring the most competitive total price inclusive of tax and shipping costs will the key to driving conversion.
As eCommerce sellers prepare for another online-first holiday season, here are four shipping trends they should be prepared for this year.
Online holiday deals will start earlier, but shipping delays will remain
Last year, 38% of consumers noted that they would start their holiday shopping in October. The earlier than usual start to holiday shopping was partly driven by retailers starting their online promotions before Halloween as they tried to mitigate constraints on shipping and logistics closer to the holidays.
The impact of the extended shopping season was seen during periods of time that historically see major upticks in consumer spending including Black Friday and Cyber Monday – expect the same this year.
As a result of earlier promotions, we will also see more consumers use alternative delivery methods, like buy online pick-up in store. By providing the convenience of an online shopping experience and removing the risk of shipping delays, alternative delivery methods will be critical for retailers to serve consumers this holiday season.
Likewise, retailers should also expect to utilize the gig economy more this season to help with potential shipping delays. Third-party fulfillment and last mile delivery services can help augment delivery to customers – especially when traditional shipping methods are strained in the height of the season.
Retailers should also be prepared to manage varying tax obligations based on changes in shipping and delivery services this holiday season.
Omnichannel will bring retail full circle – back to the days of catalog companies
As many retailers restructure their physical locations to support blended shopping experiences, like in-store and curbside pickup, we will see many retailers revert back to physical catalog mailers.
A cheaper alternative to cost-per-click digital advertising, physical catalog mailers will be a cost-effective and impactful method of reaching customers this holiday season as more shopping takes place in an omnichannel fashion.
Unlike the ecommerce-dominated nature of last year’s holiday season, retailers can expect that consumers will demand seamless, blended shopping journeys that span channels, platforms, and devices.
As such, retailers should prepare for the return of the catalog company days when it comes to reaching consumers and fulfilling their orders.
A focus on DTC shipping
In the wake of the pandemic, we’re seeing a larger emphasis on direct-to-consumer shipping from brands of all sizes – including the world’s largest ones.
Before, many brands sold their products to retailers to then sell to customers, now they are changing their behaviors to reach consumers directly and have better visibility across their entire value chain.
Retailers should expect to see more applications around auto-replenishment for consumer package goods. For application in today’s omnichannel environment, retailers will want to use technology, like QR codes, to allow consumers to easily set up auto-replenishment while shopping in-store so they can get regularly purchased goods automatically delivered without having to come back in the store.
Hybrid shopping experiences will reshape logistics
The last trend that retailers should be prepared for is a fundamental shift in the very fabric of logistics. Much like the consumer shopping experience, demand for seamless, omnichannel experiences means that logistics will require a hybrid approach to keep pace.
In the past, retail supply chains were designed to get stores ready by providing bulk packages of products – a process that could take days or weeks for delivery.
Today, the time between retailers sourcing goods and getting them to the end consumer is much more condensed – sometimes a matter of hours.
As a result of the expedited nature of retail today, expect to see retailers expand the number of distribution centers they use to limit pickup refusals and trim down delivery times.
As retailers adopt a hybrid distribution strategy, we will likely see the trend of turning brick and mortar locations into additional distribution space to continue this holiday season.
The holiday season is right around the corner and consumers are already preparing to start their shopping before we take down the pumpkins and put away the costumes.
As retailers finalize their strategies for this season, paying close attention to changes in shipping will likely define how successful they will be in delivering goods to customers and keeping them happy.
About the Author: Meg Higgins is the VP/GM of eCommerce and Marketplaces at Avalara. This guest post was provided by Avalara and the views expressed herein are the authors’ alone.
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