By YonBee Yang | December 21, 2020
Despite the unexpected hit the economy took from COVID-19, with each passing holiday, we continue to see an increase in spending, especially within e-commerce. To learn more about this year’s record-breaking numbers, check out our previous blog How COVID-19 Changed Black Friday. With retailers prioritizing the health and safety of their customers and workers along with what Kleinhenz, an NRF economist, considers to be a “psychological factor…to have a better-than-normal holiday”, we have seen a dramatic shift in the consumer’s attitude from the beginning of the pandemic vs ten months into this new normal.
The initial impact of the virus caused a major decline on the consumers’ willingness to spend money on anything except for essential items such as hand sanitizer, disinfectant wipes, and toilet paper. Now, we are seeing consumers starting to lean into this new way of living as well as longing to recover from this setback by spending more and making the most out of the holidays.
With a strong emphasis placed on social distancing and contactless interactions, e-commerce and technology have become critical for retailers to survive. According to Stephen Rogers, executive director of Deloitte Insights Consumer Industry Center, Deloitte LLP, “Increasingly, the average consumer will be looking to contactless commerce, convenience and bargains throughout the remainder of 2020.” Here are some highlights from the Deloitte consumer survey as of November 30, 2020:
- 54% of U.S. consumers say if they found a great deal on a non-essential item, they would buy it today
- 41% say they are OK spending more on convenience
- 33% say they will purchase from more locally sourced items going forward even if they cost a little more
With more expected spending, it has become necessary to properly stress test your systems so as not to be taken by surprise by a sudden increase in shopping traffic. Appropriate volume or load testing should be done as early as possible even though the sales period might have been extended to a longer period of time to help spread out demand. With the numbers from just the past few holidays, experts are forecasting spending to continually be on the rise.
Although the system itself plays a huge part, the focus should not solely be on the technology since it will only account for changes virtually and not what actually gets picked, packed, and shipped to the customer. Actual fulfillment and shipping must also be accounted for by making sure there is a safe, reliable, and sufficient workforce and process in place to physically be able to handle the expected surge in orders.
With the sudden surge in spending this holiday season, preparation to meet demand is vital to staying competitive in this new environment. For more information on how to prepare your supply chain for the unexpected contact firstname.lastname@example.org.
Contributor: YonBee Yang, Supply Chain Consultant at Bricz