Are retailers ready for the last-minute holiday rush?

In the run up to last year’s holiday season, many of the UK’s retailers were primarily concerned with reducing pandemic-related inventory backlogs and meeting demand driven by consumers’ pent-up savings. Twelve months later, retailers are facing a different landscape altogether. The mood music has changed this peak: with rising interest rates, inflation and other economic pressures, there are talks of a more muted holiday shopping season. And yet a recent Barclays report states that inflationary pressures notwithstanding, consumers are still willing to spend on non-essentials like luxuries, while a Kantar survey recently found that adults’ propensity to increase their spending around Christmas remains largely buoyant.

While it remains to be seen whether the holiday shopping season will be muted, we are likely to see consumers deferring expenditure until the last minute. Indeed, PwC research notes, “aware that a pre-season of holiday deals is increasingly becoming the norm, [customers] are biding their time while waiting for the best deals.” So, what are the implications for retailers of this trend towards last-minute purchasing?

Perhaps the most obvious is that the holiday season will be busy and customer appetites will remain high. This is good news – but it’s not ideal for retailers planning for peak. It means their teams and capacities will be tested up to the last minute, yet deliveries cannot be delayed because customer expectations of speedy fulfilment will remain. Add to this the potential for carriers to cap their deliveries to avoid the chaos of 2022 and retailers are left in a difficult position. They will need to either stretch teams and resources beyond their limits but risk jeopardising operations in the long term; or work at normal capacity but risk not fulfilling Christmas orders on time. Clearly, neither outcome is desirable.

The gift of convenience

It’s in instances like this that retailers turn to GXO for seamless support during the holiday shopping season. After all, we have a broad range of world-class logistics solutions, spanning warehousing and transportation, to enhance the supply chains of retailers of all sizes – including in times of temporary and seasonal change.

Clicklink® is our premier Click & Collect solution, a world-class delivery network built for retailers by retailers. Unlike parcel carriers, Clicklink bridges retailers’ online ecosystems with their brick-and-mortar presence. A customer can order their last-minute gifts on December 23 and collect them in store the following day, just in time for Christmas. For retailers, Clicklink is beneficial because it makes planning easier – the delivery network can even carry out daily stock drops into key stores – and it facilitates an in-person touchpoint with the customer. These interactions can then open opportunities for upselling and cross-selling, which adds to retailers’ sales.

At the backend, there are other benefits for retailers and wider society too. With Clicklink, we can batch together different retailers’ orders for a more efficient and cost-effective delivery solution which further benefits the high street by reducing the number of vehicles. Whereas a single retailer may deploy significant resources for the delivery of a handful of orders, we can pool together that retailer’s delivery with other brands in the same locale and achieve next-day delivery for all. GXO Clicklink is a consolidated retail delivery solution, supporting omnichannel ambitions. Beyond the clear financial benefits to retailers, there are carbon emissions savings here too: fewer trips required for a comparable volume of deliveries.

Capacity on demand

Meanwhile, GXO’s shared warehousing solution GXO Direct enables retailers to tap into resources that can be scaled up or down with demand. Thanks to fast, cost-effective deployment, GXO Direct offers retailers that much needed flexibility – ramping up to meet that last-minute purchasing peak ahead of Christmas, and then switching gears for the high returns period in the new year. The rapid release of inventory from returns to meet new customer orders is vital; as we all know, a slow returns process erodes margin. GXO returns management ensures returns are processed quickly, providing a more convenient service for customers and maximise margin on returned stock for retailers.

A more compressed peak holiday shopping season is a challenge which – with the right preparation and logistics partner – can be turned into a great opportunity. Retailers cannot enter this year’s holiday season with last year’s tools and tactics – agility and adaptation are key. GXO can help its clients to achieve this agility and fully meet unpredictable consumer demand.