How supply chain inventory is impacting holiday shopping.
The 2021 holiday season is in no way going back to “normal.” Supply chain inventory challenges, spiked inflation rates, heightened emotions, and the increased popularity of ecommerce have reshaped the retail world. Now, consumers have much higher expectations while shopping online.
Today, Quantum Metric released a report highlighting ecommerce trends based on data from our platform, as well as additional survey insights from 2,000 U.S. consumers about their sentiments on the holiday season.
To better understand what retailers should be watching out for and responding to this holiday shopping season, we went to the data. One major trend that stood out to me, however, is how supply chain inventory is impacting the holiday shopping season.
Here’s a look at some of my takeaways from the report, including some of the biggest surprises.
Customers are frustrated, especially by companies that aren’t prioritizing mobile experiences.
The vast majority of consumers will complete at least part of their holiday shopping on mobile this season. Data from the Quantum Metric platform shows that mobile has actually driven an average of 62 percent of retail sales in the last two months alone.
Customers’ frustration has also spiked in Q3, especially on mobile. In fact, mobile sees rates that are 1.5 times higher than desktop devices. If you aren’t building for mobile, then you are alienating your customers, who have grown accustomed to buying what they need in just a few swipes and taps, thanks to apps like Amazon.
Out-of-stock issues are expected, but consumers still have high expectations.
After 18 months of reading about supply chain inventory challenges, consumers are prepared for items to be out of stock, from toilet paper to the Nintendo Switch. In fact, 67 percent admit they’ve already faced out-of-stock issues during their holiday shopping.
The challenge for retailers is helping customers overcome frustrations by offering an intuitive customer experience. Inventory issues are not only increasing customer frustration, but shopping cart abandonment. The Quantum Metric platform has already seen abandoned cart rates jump as much as 69% compared to what was seen in 2020.
We are likely to see this number remain high and even spike to new levels on Black Friday, as consumers quickly jump from site-to-site trying to find specific items in inventory.
To remedy some of these challenges, retailers should be as transparent as possible about what items are out of stock. They should also be prepared to provide alternative suggestions for when an item is out of stock, or perhaps even offer a discount to frustrated shoppers. This can help decrease shopping cart abandonment rates.
Supply chain inventory concerns have pushed the holidays earlier than ever…
Our report found many people started their holiday shopping way back in September. Now that’s super early! I was still focused on buying Halloween decor.
Gone are the days when people saved the bulk of their shopping for Black Friday or Cyber Monday. Now, shoppers are constantly on the hunt for gifts three or four months before the holidays, thanks to supply chain uncertainties. We’ve found many consumers are forgoing discounts and sales to make sure they are able to buy the gift, even if it means purchasing at full price.
This has shifted Black Friday/Cyber Monday from the kick-off of the season to the grand finale. I’d anticipate, we’ll see a major spike in sales throughout November that reaches its peak around Black Friday and Cyber Monday.
…and created new holiday season shopping habits.
Consumers report spending, on average, 2 hours a day holiday shopping, which is a really long time. Holiday shopping is something they do while multitasking. It’s a fun way to spend their time while watching TV or taking a break from work. They are browsing, researching and purchasing products on their phones, tablets, and desktops.
For this reason, brands that deliver intuitive, beautiful user experiences will foster loyalty among their consumers and keep them coming back for more, even after the holidays end. It’s not just about the holiday sale, but the experience that leads to that sale and keeps customers coming back for more.
The most surprising trend, however, is how people are buying gifts without an intended recipient. Panicked by supply chain problems, people are preparing for holiday celebrations by ensuring that they have gifts for friends and relatives they haven’t seen in a while. They’re trying not to miss out on the hottest kids gifts, the latest electronics, or any other high-demand items.
With consumers buying more, retailers could see an influx of purchases that make inventory management that much harder.
But trends will inevitably emerge over the next few months as well.
For online shoppers, the question might also be, “How will companies be transparent with customers if they are out of an item that has already been paid for, or if an order is running late?” Tools like anomaly detection can help brands prepare for sudden changes in demand.
Of course, there is also the question of whether supply chain inventory problems will actually lead to empty shelves in-store? Only time will tell.
In our next report, I expect that we will see data showing customer frustration continue to spike, especially on mobile devices. With rising inflation, we should also see average order values increase, even if consumers are shopping in smaller increments. What I’ll be watching is how inflation might also impact purchasing. Will consumers buy more than 2020?
I’m also interested to see if we will see major spikes in how many people pay for expedited shipping. Consumers hate to pay extra for shipping; we’ve grown so accustomed to free shipping thanks to Amazon and brands that offer deals. That said, I am curious how important “on time” or “fast” shipping will become.
Follow along as we breakdown shopping behaviors over the holidays.