Peak season planning is a year-round process. Right now, U.S. retailers are ramping up for an expected 3.3% increase in holiday sales totaling $1.262 trillion. Ecommerce is expected to see a 15.5% increase to $235.86 billion, while mcommerce is predicted to capture 49.6% of eCommerce sales—quickly becoming the digital sales leader during holiday seasons. Despite inflation, supply chain disruptions, and surging fuel costs, shoppers continue to spend. But what they expect from their retail customer experiences has changed—and it’s different from previous years, in ways that may surprise you.
From a Surge to a More Steady Stream
Peak season 2021 was a boon year due to various factors—the ripple effects of shoppers having more discretionary income, the easing of COVID restrictions, and a desire to get back to living life. Last year was the first year that brick-and-mortar growth exceeded eCommerce growth, likely the result of the re-emergence of in-store shopping. Ecommerce also saw a major increase. As 2022 has progressed, the pandemic has faded from the headlines, but the buying behaviors born from it are here to stay—and so are customer expectations.
Say Hello to the Hybrid Shopper
Shoppers have normalized pandemic-inspired retail order and fulfillment options, leading to the emergence of the Hybrid Shopper. This shopper seeks out convenience, flexibility, price, and speed of delivery when making purchases, utilizing omnichannel fulfillment options. The Hybrid Shopper is more willing to try new brands or products due to out-of-stocks or extended delivery timelines, and brand loyalty is less important to them than getting their product in hand. The Hybrid Shopper flows seamlessly between eCommerce and brick-and-mortar options—moving across channels throughout the buying lifecycle.
This is the shopper you’ll be competing for in this year’s peak season and in every customer engagement year-round. What do we know about the Hybrid Shopper?
Radial recently commissioned a survey of 1,000 U.S. adult respondents to understand consumer sentiment as the pandemic eases, obtain insight into evolving behaviors and expectations from 2020, and gauge consumer reactions and impact on purchasing decisions. We believe this data can help as you are planning for peak season 2022.
Here’s five survey insights that will help you realize a successful peak:
#1: Provide multiple fulfillment options. More than half (54%) of Americans shop more online today than they did two years ago; however, while 51% prefer online shopping as their first preference, 36% still say in-store shopping remains theirs. When we inquired about additional fulfillment options, we see that the second-most preferred options are:
- Curbside pickup (24%)
- Pickup in-store (21%)
We asked survey participants to rank their preferences from one (1) being first choice, to five (5) being least preferred. When we group together the percentages that chose one and two as their preferred options, the numbers show that:
- 78% prefer online shopping
- 56% prefer in-store shopping
- 31% prefer curbside pick-up
- 24% prefer pick-up in-store
- 13% prefer 3rd party or personal shopper
A blended shopping experience has become part of consumer expectations for order fulfillment. Retailers need to provide multiple fulfillment options, but also ensure that bottlenecks are removed and that they deploy automation and optimization across every channel to deliver a great customer experience.
#2: Don’t assume you know generational differences. It‘s easy to make assumptions about generations. Turns out, there’s room for surprise. Our survey found that 24% of Gen Z (18-25 year-olds) shop less online than they did in 2020—which may mean that this generation is seeking out in-store experiences to break the pandemic isolation.
Who’s shopping more online now than before the pandemic?
- 61% of Millennials
- 50% of Generation X
Millennials are the most active online shoppers (19% shopping daily and 44% shopping several times a week) and Baby Boomers are the least active, with 49% shopping once per month. A strong peak season approach requires that you take a diversified, personalized approach to targeting demographics.
#3: Be aware that inflation is not changing spending habits for everyone. Inflation is at the highest it’s been since 1981, but shoppers continue eagerly spend. Those in income brackets of $25K per year are least likely to change their spending habits, as are those with incomes over $75K. Those with incomes of $50 – $75K were the most likely to change their spending habits due to inflation.
Here’s what the survey respondents said:
- 34% have not changed their spending habits at all
- 40% have stopped purchasing unnecessary items
But shoppers are also finding ways to mitigate costs:
- 34% have delayed less-important purchases while focusing on more important ones
- 25% have bundled online purchases for free or reduced shipping
Finding ways to reduce costs for shoppers despite higher costs of goods and transportation are essential strategies to entice them to check out and continue spending.
#4: Focus on diversifying your supply chain. Aside from staffing shortages, delays in supply chains and logistics operations continue to disrupt the customer experience. Here, we see generational differences, too.
Despite shopping less online, Gen Z is becoming the largest consumer group and they’ve become the top focus for brands in terms of customer experience. Generation Z is undecided in terms of brand loyalty with 60% willing to switch brands if faced with longer delivery times or out-of-stock items. A study conducted by SiteCore found that 37% of Generation Z consumers were willing to abandon their cart or write a negative review over a poor digital experience, indicating customer happiness goes beyond expedited shipping times and well-stocked products.
However, Millennials are the least loyal with 67% willing to switch brands due to delays or out-of-stock items.
Just as consumers are willing to look for multiple providers for products, retailers need to be able to source product from a diverse range of suppliers. Companies that have items in stock and ready for shipping or pick-up are the ones customers reward—as long as the entire experience feels good.
#5: Improve delivery times to gain loyalty. Overall, the pandemic introduced slower processes and a need to wait longer as COVID policies slowed things down. Shoppers have adapted to this, but still feel there’s a threshold for when “slow” is “too slow”.
Our survey indicated that customers expect more lead time is required for delivery. They still view Amazon as the golden standard for delivery service levels.
- 50% expect delivery in 3-4 days
- 27% expect delivery in 1-2 days
They’re also willing to pay for faster delivery:
- 40% of millennials are very likely to pay more for faster delivery
- 41% of Generation Z consumers are likely to upgrade their shipping
Baby boomers (79%) are least likely to pay for faster delivery.
Customer expectations put added pressure on shippers like FedEx and has retailers looking for ways to improve shipping and delivery times, including opting for multi-carrier choices that enable faster delivery based on customer location. Retailers need to expand their delivery and shipper options to better meet customer expectations.
Prepare now to delight customers during your high-volume season
Planning for peak season requires orchestration of technology, automation, integrations, supplier networks and logistics—as well as the coordination of marketing, sales, and customer support. While peak seasons are defined by high volumes during a limited amount of time, the best practices you put in place for a successful peak will also support your customer experience every day of the year. As you plan for Black Friday and Cyber Monday and the entire holiday season—think of how the decisions you make to support customers during those times can also support them every time they engage with your brand.
Radial provides a full range of omnichannel and fulfillment and transportation services around the globe to help you implement best practices and deliver great customer experiences.