Cyber November and the 2020 Holiday Season

What will Black Friday 2020 look like? For many U.S. consumers, the day after Thanksgiving involves a time-honored tradition. Rise at the crack of dawn for a day’s trek to nearby retailers.

The goal?

Snagging deep-discounted home goods, electronics, and apparel. Arrive early enough, the bounty can be rewarding—if you can withstand sizeable crowds and long check-out lines.

This brings us back to today, where 2020 and sizeable crowds are an oxymoron. How are retailers preparing for Black Friday amidst a global pandemic?

Many are spreading the deep discounts of this most sacred shopping day across the month of November. In fact, retailers such as Walmart, Target, and Best Buy are closing stores on Thanksgiving. Black Friday will still occur, but Cyber November encourages consumer shopping with safety, social distancing, and e-commerce in mind.

There is a bright spot in a year of significant industry challenges—the retail sector is on a rebound.

According to the Global Port Tracker report, released by the National Retail Federation and Hackett Associates, imports in August reached an all-time high (2.1 million twenty-foot equivalent units) as retailers replenished inventories leading up to the holidays.  

Jonathan Gold, NRF vice president for supply chain and customs policy, said, “After staying at home this spring, consumers are buying again and retail supply chains are working overtime to keep up with demand.

“Nothing about this year is predictable, but retailers are making sure their shelves and warehouses are well-stocked for the holidays,” said Gold.

“They are also stocking up earlier than usual because they know many consumers will shop early this year to avoid crowds and shipping delays. Some holiday merchandise that normally wouldn’t arrive until Halloween is already here.”

How could a Cyber November strategy affect retail fulfillment and distribution during the holidays? That depends on consumer behavior.

E-commerce Reigns Supreme  

Shopkick conducted a survey of 17,000 U.S. consumers about their shopping plans for Black Friday. The results show a retail environment transformed by the coronavirus pandemic.

  • A majority of consumers (67% compared to 51% in 2019), plan to rely on e-commerce sites for their holiday spending rather than in-store visits. The continued uncertainty of COVID-19 and threat of exposure has consumers rejecting long lines and crowded stores.


  • Almost half (44%) of consumers will use retailers’ buy online, pick up in-store (BOPIS or Click and Pick) option. It is a convenience that many consumers depended on throughout 2020. Expect more retailers to offer BOPIS as a permanent omnichannel offering.  

  

  • Similar to 2019, 34% of customers are completing their Black Friday shopping prior to Thanksgiving. Only 17% are waiting until Black Friday to begin their holiday spending.

 Dave Fisch, general manager of Shopkick, says, “As the most important season for retail quickly approaches, there is rising concern about the impact the COVID-19 crisis could have on consumer shopping behaviors.

“Our data shows that holiday shoppers are already preparing for the season in new ways. With less of a focus on the experiential holiday activations that have dominated years past, brands and retailers must step up their omnichannel and e-commerce capabilities to be successful through the end of the year and beyond.”

Black Friday Fulfillment and Distribution

Retailers can expect heavy e-commerce traffic this holiday. Statista reports that between 2010 and 2019, fourth quarter total e-commerce retail sales have increased from 4.6% to 11.5%, respectively.

What does the crystal ball say for 2020? According to Deloitte, retailers can expect a 25% to 35% increase in 2020 holiday e-commerce sales compared with the same period in 2019.

Deloitte’s retail and distribution team projects total holiday spending to generate between $1,147 billion and $1,152 billion in sales.

Rod Sides, vice chairman, Deloitte LLP and U.S. retail and distribution sector leader, says, “For retailers, this holiday season will continue to push the boundaries on the importance of online, convenience, the role of the store, and the criticalness of safe and speedy fulfillment.”

To prepare for a successful Cyber November and Black Friday, fulfillment and distribution planning is critical. The focus should always be to maximize the customer experience.

Consider:

  • E-commerce infrastructure. The expected online traffic to retail sites requires the appropriate IT infrastructure to accommodate order spikes and processing. Analysts recommend stress testing your online store for speed and performance.  

According to Vend, a retail management solutions provider, every one-second delay in page load times leads to a 7% reduction in conversions. Imagine this scenario affecting thousands of online customers.

Customer experience begins at the load screen, but order fulfillment accuracy has to be right.

  • Omnichannel distribution. Managing the customer experience can be challenging for retailers—particularly during Black Friday. An omnichannel distribution strategy opens various channels for order fulfillment and distribution, while delivering on consumer expectations in real time.

A capable warehouse management system (WMS) is essential for fulfilling Cyber November e-commerce orders where software and automation combine for optimal piece-picking efficiency. A WMS like WAMAS® enables a warehouse to scale its system from 1,500 items per hour to 30,000 to avoid costly bottlenecks.

As more imports arrive monthly, a WMS can ensure retail goods are stored quickly and efficiently with automation, such as automated storage and retrieval systems and automated guided vehicles. Once orders are received, automation brings the items to goods-to-person workstations for order fulfillment and distribution.

An omnichannel distribution strategy means fulfilling e-commerce orders at the warehouse or at retail stores themselves. Using a retail store as a fulfillment center provides more options to deliver orders closer to the customer.

Also, knowing your inventory data in real time enables more strategic omnichannel distribution where retailers can reroute trucks in-transit to other stores with low supply.     

  • Shipping and return expectations. Competition among retailers hits its peak in November as customers open their wallets for holiday shopping. That willingness to spend also comes with expectations of free or discounted shipping.

Easyship says retailers need a shipping strategy for Cyber November and Black Friday to avoid lost sales. As customers fill their digital carts and checkout, additional fees, high shipping costs, and long delivery dates lead to abandoned carts and empty profits.

Upfront transparency of shipping rates and options prevents sticker shock at checkout and promotes customer loyalty.   

The same is true for return policies and procedures. Merchandise returns are part of the holiday ritual for many consumers. Statista reports that in 2019, $309 billion in retail merchandise returned to stores. However, making product returns convenient for the consumer can instill customer loyalty and brand confidence.

Where does returned merchandise go? Retailers should also implement a returns handling process with their warehouse provider. SSI-Schaefer works closely with its retail customers to integrate a return process that quickly and efficiently reallocates returned inventory for resale.

While the 2020 holiday season arrives with uncertainty and change, retailers can persevere with planning and purpose.



Links:

https://nrf.com/media-center/press-releases/imports-set-new-record-retailers-replenish-inventories-and-stock-early

https://www.shopkick.com/partners/blog/tis-the-season-consumers-will-turn-online-to-holiday-shop-during-the-pandemic/

https://www2.deloitte.com/us/en/pages/about-deloitte/articles/press-releases/a-tale-of-two-holiday-seasons-as-a-k-shaped-recovery-model-emerges-consumer-spending-heavily-bifurcated.html

https://www.statista.com/statistics/187471/estimated-share-of-e-commerce-in-total-sales-in-the-us-in-q4/

https://www.vendhq.com/blog/bfcm-black-friday-cyber-monday-retailers/

https://www.ssi-schaefer.com/resource/blob/66190/d46b7b2906810f2f8dc4e9d723472ae6/brochure-fulfilment-factory-en-dam-download-en-1686--data.pdf

https://www.ssi-schaefer.com/en-us/software-solutions/software-products/logistics-software-wamas--54218

https://www.ssi-schaefer.com/resource/blob/66190/d46b7b2906810f2f8dc4e9d723472ae6/brochure-fulfilment-factory-en-dam-download-en-1686--data.pdf

https://www.shopify.com/enterprise/ecommerce-returns

https://www.easyship.com/resources/ecommerce-peak-season-toolkit/shipping-and-inventory/prepare-your-shipping-strategy-for-peak