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This post is the first in a series exploring the dynamics of the 2020 retail peak season. To learn more, please read the other entries in this series:

2020 Peak Season: What Retailers Can Expect

The 2020 Peak Season will be unlike any holiday season retailers have ever experienced.  COVID-19 has reshaped consumer shopping behavior, influencing consumers to shop online for essential and non-essential items that traditionally were purchased in-store. New consumer shopping behaviors and a confluence of COVID-19 driven factors, including reduced demand, lower import levels, massive job losses, and the ongoing United States-China trade war, make it challenging to predict total consumer spending for the upcoming peak season.

Regardless of how 2020’s peak season will perform economically, we know consumers will spend money during peak season, but how, when, where, and what they spend their money on will be different than in previous peak seasons.

 Peak Season Will Begin In October And That Will Change The Fate Of Black Friday

Thanksgiving and Black Friday traditionally kick-off peak season for retailers in the U.S.– but some retailers, like Target, will start their holiday sales in October to accommodate for COVID-19 safety restrictions and the increased demand for home delivery.

Target has also announced it will be closed on Thanksgiving. Additional retailers, like Kohl’s, Dicks Sporting Goods, and Walmart, have all announced they will be closed on Thanksgiving, which will dramatically change the performance of Black Friday.

Consumers also plan to begin their holiday shopping earlier this year.  According to Modern Retail, analysts believe consumers will start their holiday shopping earlier to avoid product shortages and supply chain disruptions that occurred at the peak of COVID-19.

 Ecommerce Will Continue To Grow And What Consumers Purchase Online Will Change

2020 was a boom year for ecommerce due to COVID-19 safety concerns and stay-at-home orders. Adobe Digital Insights reports the COVID-19 pandemic’s impact on consumer spending resulted in an additional $93.9 billion spent online since March 2020. With this trend, online spending for 2020 is projected to exceed the spend for all of 2019 by October 5th.

Covid-19 has not only influenced ecommerce growth but has also changed the type of items consumers purchase online. In the past, larger and bulkier items such as furniture and exercise equipment were primarily purchased in-store. Since the start of the pandemic, consumers have purchased more furniture, exercise equipment, and large appliances online. This behavior is forecast to continue throughout the 2020 peak season, according to Criteo’s aggregated data from 20,000 global retailers.

For retailers adjusting to the influx in online shopping, it will be critical to work with a final mile provider who can provide the last mile capacity and specialized service needed to successfully deliver these larger items.

 More Brick And Mortar Locations Will Become Fulfillment Hubs

The first half of 2020 forced retailers to adjust store capacity and put in additional safety measures to stop the spread of COVID-19. To compete during peak season, retailers will need to continue these safety measures and turn their brick and mortar locations into fulfillment hubs to meet the growing demand for ecommerce.

For retailers to have a successful peak season, it is recommended they transform their brick and mortar into multifaceted locations that offer shoppers the following options:

  • Shop in-store
  • Buy online and pick up in-store (BOPIS)
  • Drive-thru pick up
  • Curbside pick up
  • Shop online and home delivery

Before COVID-19, stores like Target were already in the process of turning their brick and mortar locations into fulfillment hubs, but according to TechHQ, the pandemic accelerated this momentum. Retailers who transform their brick and mortar locations into fulfillment hubs will be better able to meet the demand of peak season online and in-store shopping.

 Traditional Final Mile Providers Will Be More Expensive and Will Run Out of Capacity

Salesforce predicts that traditional small parcel delivery providers, like UPS, FedEx, and DHL, will exceed capacity by 5% across the globe during the 2020 holiday peak season. Ecommerce is growing faster than final mile shipping capacity, which will make it difficult for shippers to find file mile capacity during peak season. In addition, with consumers purchasing larger items online, shippers must find final mile providers who can deliver larger items to residential locations.
Procuring final mile capacity will not only be challenging but expensive this peak season.

Business Insider reported UPS, FedEx, and USPS have all announced holiday surcharges that are higher than previous peak season surcharges. Salesforce projects these increased surcharges will result in a total of $4.5 billion spent on peak season surcharges.

 Start Planning for Peak Season Now with a Consultant in Your Corner

For retailers to have a successful peak season, it is critical they start planning now, expand their ecommerce capabilities, transform their brick and mortar locations into fulfillment hubs, and secure final mile capacity.
To develop an agile peak season strategy, collaborate with a consultant, like GlobalTranz, who can leverage technology, final mile solutions, and multi-modal transportation services to ensure your organization is successful this peak season.

Request a GlobalTranz Solutions Consult Today.

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