6 Retail Challenges Expected For The 2021 Holiday Shopping Season
By Devin Partida, ReHack.com
As the COVID-19 pandemic continues to cause disruptions in the retail space, retailers will likely face challenges in the upcoming months as they enter the 2021 holiday season.
2020 was far from ordinary — consumers forced retailers of all kinds to adopt curbside service, buy online pickup in-store (BOPIS) models, and delivery to meet their expectations. Shoppers needed more options for payment as contactless methods became increasingly popular.
More shoppers were concerned about the risks of exposure to the virus, and retailers had to improve cleaning and sanitization efforts to accommodate guests in-store. In addition, the industry experienced a significant shift to e-commerce operations.
Because the pandemic is still rippling through communities across the nation, its effects will continue to disrupt current retail operations and likely impact shopping during major holidays.
It’ll be critical for businesses to be aware of the challenges to find viable solutions and keep their operations running smoothly.
The retail industry will likely see more digital transformation — stores will need to be willing to adopt new technologies, whether automating their inventory management or creating a mobile application for smartphones.
Here are six examples of challenges retailers can expect to see in the future.
1. E-Commerce Will Remain A Strong Driver
E-commerce grew to $431.6 billion in the U.S., and it’s only expected to increase annually. Enterprises will need to prepare for an onslaught of customers visiting their websites.
Handling an increasing number of customers may prove challenging, whether that’s providing tailored suggestions to loyal customers or improving accessibility on their sites.
2. Customers Will Spend On Their Wants, Not Needs
Last year, shoppers shifted their priorities and focused on purchasing essential items and had less of a focus on making big purchases based on their wants.
However, based on the current state of the pandemic, it’s likely that more people will revert to shopping based on what they want to buy and not necessarily what they need.
The holiday season is all about gift-giving, and no one will be handing out essentials. People will be interested in purchasing presents such as consumer electronics, clothing, and gift cards. Luxury products and items needed for vacations are also expected to be popular this season.
3. Holiday Shopping Will Begin Earlier Than Expected
Holiday shopping began much earlier in 2020 than in past years, as events like Cyber Monday extended into a week.
Some stores began promoting Black Friday sales in mid-October — the trend will likely remain as the next season is just around the corner. More people have money in their pockets that will go toward holiday shopping, and retailers will need to embrace this change.
Because so much was lost during the pandemic, people will want to use shopping as retail therapy and give meaningful gifts to their loved ones.
4. Shoppers Will Demand Free Or Low-Cost Shipping Options
Retailers can make their brand stand out by offering their customers low-cost or free shipping options this holiday season. It may be challenging to provide these perks, but it will be something retailers should consider implementing.
Around 66% of customers expect free shipping on their online orders, and even more want it when they reach a specific dollar amount. This is a challenge retailers should focus on before the holiday season arrives.
5. Retailers Will Need To Prepare For Possible Closures Due To The Delta Variant
The delta variant continues to impact customers, and its rapid spread will likely affect traditional retail operations. No person is looking forward to more lockdowns or quarantines, but depending on the state of the pandemic, it is something retailers should prepare for to stay ahead of the curve.
There have been signs of shoppers pulling back as the delta variant took hold — people were spending less on nonessential items. It’s understandable that until the pandemic is a thing of the past, it will continue to affect industries, and the retail sector is no exception.
6. Supply Chains May Experience Disruptions
U.S. ports are in for the long haul when it comes to shipping holiday season merchandise. Shipping has proven to be a challenge for retailers already, and as the holiday season approaches, the issue will only become more prevalent.
Some of the challenges with supply chains are unavoidable, one of them being the disruptions that came with the pandemic. Examples of other supply chain challenges include financial pressures, reliance on global procurement, and cybersecurity risks. Retailers will likely need to anticipate supply chain challenges as the holiday season comes closer.
While these challenges may cause disruptions in the retail industry, businesses must be aware of them to prepare strategies to combat them.
Preparing For An Uncertain Future
The holiday season is usually chaotic for retailers, but with possible issues with the delta variant and supply chain issues, they will have their work cut out for them. Managing uncertainty is crucial for retailers, and they’ll need to be flexible, agile, and willing to adopt change during the 2021 holiday season.
About The Author
Devin Partida is a writer and blogger interested in retail technologies and business solutions. To read more from Devin, visit ReHack.com, where she is the Editor-in-Chief.