How Will COVID-19 Impact Consumer Holiday Shopping Behavior?

Tracey Meyers
·3 min read

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‘Tis the season to discuss potential impacts on consumer holiday shopping behaviors, according to retail solution firm Voxware — and it appears that gifts will be purchased mostly online, and early, due to the coronavirus pandemic.

Voxware said it surveyed 500 U.S. consumers in early June to gauge how holiday shopping may evolve due to COVID-19 concerns, and its key findings revealed that newly emerged behaviors may strain distribution operations.

“Significant” changes such as consumers’ plans to purchase small, difficult to “pick and pack” stocking stuffer items online, in lieu of in-store, will challenge supply chain operations, “resulting in ill-prepared distribution centers struggling to meet consumer expectations in what is expected to be a make-or-break buying season,” the firm explained.

Fifty-one percent of respondents expect to begin holiday shopping earlier than normal this year, the survey found, likely due to expectations for slower or delayed deliveries. Unsurprisingly, most of the shopping will take place online, with 76 percent of respondents saying they intend to purchase more than half of their gifts online, inclusive of the aforementioned stocking stuffers and last-minute gifts, according to 62 percent of respondents.

Another interesting change is that 57 percent said gifts will be shipped directly to recipients, more so than last year.

“These reactions are indicative of consumers’ desire to reduce the risk of exposure to COVID-19 by limiting time spent in physical retail locations and highlight the increased role that e-commerce will play in 2020,” the firm said. “Safety concerns are undoubtedly compounded by the challenges consumers faced trying to obtain scarce products or delays in receiving products that were in stock but de-prioritized for distribution at the height of the COVID-19 crisis.”

But, more specifically, new expectations present “serious challenges” for promoting products, inventory stocking and cost-effectively selecting and fulfilling orders, the firm explained.

Contributing factors include how distribution centers — accustomed to sending one shipment per order — may increasingly be expected to ship items within a single order to multiple addresses, Voxware said, in addition to “strategizing the most efficient way to pick and pack small items at the apex of the holiday season. COVID-19-driven behaviors require rethinking how to optimize item selection, order sorting, label printing, packing order confirmation forms and boxing — not to mention how to handle gift wrapping services,” they said.

Keith Phillips, president and chief executive officer of Voxware, said, “Those who oversee distribution operations are going to have to think differently this year to meet consumer expectations. Automation will be critical and companies that have not taken the initiative to optimize their distribution centers will struggle to deliver a flawless customer experience.”

Albeit, retailers still have time to prepare their distribution centers for automation, Voxware said, and added that it will guarantee full implementation of its solution by September for distribution teams that sign on or by July 31 to beat the “holiday surge.” The firm said its Voxware VMS solution for retailers is differentiated by improving speed, accuracy and efficiency in distribution centers, resulting in noted improvements in reliability, double-digit productivity gains, reduced labor and operating expenses, as well as transparency into distribution operations.

Phillips added, “While the holiday season is always an important time of year for every retailer, this year the magnitude is more critical than ever. For many retailers, survival will rely on a successful 2020 holiday season due to the tremendous slowdown retailers faced during the pandemic.”

“In Voxware’s previous holiday survey, 31 percent of respondents said they would avoid shopping with a retailer ever again if any aspect of their holiday order was botched. No retailer can afford that type of mistake this year.”

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