Consumer spending during the upcoming 2023 holiday shopping season is now expected to be strong — bringing good news for eCommerce retailers that have been preparing for retail’s busiest time of year. Lingering concerns over economic uncertainty, inflation, and the expectation that consumers will rely heavily on discounts and sales has made eCommerce retailers cautious as they prepare for peak. However, recent forecasts paint a more positive picture for holiday sales.
Will holiday sales be stronger than last year? There’s growing speculation that they will.
As summarized in this report by Insider Intelligence, here’s the latest predictions:
- Insider Intelligence predicts that retail sales in November and December will grow 4.5%, making it the sixth-fastest rate in the previous 15 years; eCommerce holiday sales will grow by 11.3%.
- Deloitte expects sales from November to January to increase 3.5% to 4.6%, with eCommerce sales growth at 10.3% to 12.8%.
- Mastercard SpendingPulse believes holiday spending from November 1 through December 24 will grow 3.7%, with ecommerce rising by 6.7%.
Overall, this is positive news for retailers as they carefully plan inventory and staffing for the season. These predictions only cover November through January, and do not account for the consumer trend to begin holiday shopping in October. With those sales numbers added in, it is possible the 2023 holiday season lookback will reveal an even more robust year-over-year gain.
2023 Holiday Season Started in July
As the report points out, it is increasingly difficult to gauge holiday season results when the season begins earlier each year. For example, Target plans to launch their Target Circle Week on October 1 and Amazon’s Prime Big Deal Days will take place the following week. Walmart correlates with their Walmart Deals for Days holiday kickoff on Oct 9. These will no doubt push other retailers to compete with similar early holiday deals, offsetting the traditional Black Friday/Cyber Monday holiday sale kickoff.
Consumers have reported that they plan to start their holiday shopping earlier this year, though it’s noteworthy that they stated the same intent for Holiday 2022 and did not follow through. But with major retailers offering mega sales in early October, there will no doubt be a corresponding consumer response to save on budget and take advantage of those deals.
Already this year, 11% of holiday shoppers began shopping in July with Amazon Prime Days and Walmart Deals days. As peak season shifts earlier, many retailers are displaying Christmas and Halloween items during Back-to-School days. It remains to be seen whether shifting the holiday season earlier each year will impact consumer shopping trends over time. However, this year, it appears consumers are in a stronger position with a low unemployment rate, higher wages, and cooling inflation.
Holiday Shopping Predictions Impact on eCommerce Fulfillment
A positive forecast for above-average holiday sales means eCommerce retailers need to ensure that their fulfillment capacity can deliver higher order volumes. It also means they need a well-oiled omnichannel operation that delivers on price, supply chain visibility, product availability, order fulfillment times, shipping rates and timelines, and return policies. Retailers need to be able to scale when order volume spikes, and this means either staffing up or outsourcing.
With low unemployment rates, hiring seasonal staff to handle the uptick in order fulfillment processing may prove tough and costly. Many eCommerce retailers turn to third party logistics partners, like Radial, to shoulder the heavy lifting during peak season.
Benefits of an eCommerce Fulfillment Partner
There are numerous benefits to partnering with an eCommerce fulfillment expert:
- Fulfillment is their specialty. What takes retailers years to build on their own can be gained by simply partnering with a company like Radial that has decades of experience specializing in order fulfillment. Radial invests in the technology, people, processes, automation, real estate, transportation, and expertise to deliver exceptional service to retailers.
- Comprehensive data from a vast network. While not every 3PL does this, Radial draws on anonymized, aggregated data from the breadth of retailers they serve — and uses this data to help clients optimize their eCommerce order fulfillment. On their own, retailers would never be able to access the breadth and depth of decades of this fulfillment data.
- All in one services. Many order fulfillment providers specialize solely in fulfillment. Radial offers comprehensive services to support eCommerce retailers with everything from optimizing last mile delivery, to payments and fraud management, to providing customer care. A comprehensive services approach can lift the weight off retailers to support their budgets, priorities, and free them to focus on innovation and customer experience initiatives.
- Scalability. Order fulfillment providers have the scalability retailers need during the holiday shopping season. Even during the pandemic, Radial was able to provide the human resources and robotic automation to ensure clients were able to meet and exceed their customer expectations during peak and all throughout the year.
- Partner approach. There are vendors and there are partners. Radial takes a partner approach to support management, teams, and store associates in a shared goal: delivering great customer experiences to holiday shoppers. Radial works with retailers, not just for them, and consults on lessons learned each peak season to help clients optimize their next one.
As peak intensifies, and retail sales rise, now is the time to ensure order fulfillment operations are ready to handle an above average 2023 holiday shopping season. Radial is here to help.
Learn how Radial can help you during the holiday season.