In 2021, retailers should be better prepared to handle another pandemic holiday season.
Holiday sales are projected to grow at a 2.7% clip this year, according to eMarketer, with e-commerce set to grow 11% from 2020.
Retailers and shoppers can also expect Amazon to push its popular Prime Day from summer to October—as it did last year—ushering in a much longer season for online holiday shopping discounts and promotions.
“This year, retailers have the advantage of hindsight," says Ryan Faist, a marketing manager at Channel Key, which helps companies market, advertise, and sell products on Amazon, Walmart, and other online platforms. “The holiday shopping season will start earlier, last longer, and e-commerce will power more of it."
Here's how to make sure you're prepared.
Set Up New Strategies to Meet Demand
Majesty Coffee, an online retailer of premium espresso machines and other coffee equipment, plans to boost hiring and stock up on inventory this holiday season.
“Temporary hires allow customers to have a consistent, smooth buying experience despite the hectic holiday shopping spree," owner Nunzio Ross says.
He's adding more workers this fall to help restock and ship products to take advantage of the uptick in spending.
“The holiday season is when consumers have higher purchasing power because of the high demands of gift giving," Ross says. “Businesses need to stock up on extra inventory to anticipate a surge in sales, particularly on items commonly given as gifts."
Eric Anderson, founder of the Big Game Pro Shop, plans to add a personal concierge to answer product questions and other inquiries for online shoppers as demand for outdoor sports equipment and related products increases during the holiday season.
“We aim to provide our customers with an online experience that is as personalized and convenient as possible," he says.
Be Prepped and Ready
Minnesota chocolatier Robyn Dochterman expects another sales bump this holiday season, but pandemic-led concerns related to delivery system reliability and potential supply chain setbacks linger.
St. Croix Chocolate Co. weathered those challenges a year ago as coronavirus outbreaks flared across the Midwest.
This year, the business is more prepared, upgrading its e-commerce platform to handle a variety of shopping options for consumers, including home and business delivery, express pick-ups, and private visits.
“Rigid rules are out. Flexibility is in," Dochterman, cofounder of the specialty shop, which creates artisan chocolates, cocoa bombs, small-batch caramel sauces, and edible sculptures, says.
The retailer has already trained new staffers for the holiday rush, a stark contrast to last year when it had to adapt on the fly to ever-changing business conditions and purchasing patterns.
“We could hardly meet one need before customer behavior changed," Dochterman says. “Now we know more about what customers are likely to want, and we have systems in place. We'll be testing them under load for the first time, but last year, we didn't have those systems at all."
Retailers can expect shipping capacity constraints and holiday surcharges, according to industry expert Josh Dunham, as carriers project a shortfall of 5 million parcels per day during peak season.
“The biggest lesson to learn from last year is to start negotiating for capacity guarantees with the carriers right now," says the cofounder of Reveel, a provider of shipping data analytics for retailers and others. "It's more important than ever to have a carrier diversification strategy, especially if you are expecting an increase in volume during the holiday season."
Last year's inventory woes were largely tied to manufacturing shutdowns in China. This year, congestion at ports and rail lines will affect inventory levels, presenting new challenges for retailers, according to Steve Denton, chief executive of Atlanta-based Ware2Go, a UPS company that provides warehousing and shipping services.
“This is a very different situation for merchants to navigate because the inventory that's stuck in the port or out at anchor waiting to berth has already been paid for," he says. “Many merchants have some significant capital tied up in inventory that they can't get on the shelves and therefore can't sell."