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Home » Online shopping trends flatten the traditional holiday peak

Online shopping trends flatten the traditional holiday peak

Consumers flock to gift cards, bracketing purchases, and waiting for post-holiday deals, Pitney Bowes and Narvar studies show.

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December 23, 2021
Ben Ames
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Online shopping trends are continuing to flatten the traditional holiday peak, as statistics show that consumers are buying more goods both before and after the November and December rush weeks, and then returning a growing portion of those purchases, studies from Pitney Bowes and Narvar reveal.

The change in buying patterns comes even as many consumers turned away from their laptops and returned to brick and mortar stores in person over the “Black Friday” weekend after Thanksgiving last month, shrugging off concerns about the pandemic, inflation, and shipping delays.

Although that transition showed a rise in 2021 retail sales revenue compared to 2020, the explosion of e-commerce rates over the past two years has been so large that online shopping still sets the pace. That impact can be seen in the rise of shopping practices such as redeeming gift cards online, returning a rising portion of e-commerce gifts, and the “bracketing” strategy of buying several sizes or colors of an item with the intention of returning all but one.

Another shift in the retail landscape is a growing move by consumers to delay purchases until after the Christmas and Hannukah holidays have passed, according to Pitney Bowes, which provides shipping and mailing services as well as technology, logistics, and financial services. Shoppers are aware that supply chain disruptions such as import delays at container ports may tighten retailers’ stocks, so they are holding out for increased inventory and post-holiday discounts in the first quarter of the new year.

“We’re seeing that shoppers are paying close attention to headlines about inventory challenges and have tempered their expectations accordingly. Our BOXpoll survey results find that half of consumers (51%) are considering waiting until January or February to make some of their purchases, signaling that the holiday shopping season could last well into early 2022," Vijay Ramachandran, VP Market Strategy for Global Ecommerce at Pitney Bowes, said in a release.

And that approach is a long term strategy, not just an emergency holiday shopping tactic. The survey found that two-thirds (69%) of consumers are expecting supply chain issues to continue into early next year, and 62% expect them to continue throughout 2022.

The new approach may be effective, but ironically, it may also be contributing to the same volatile inventory levels that shoppers are trying to avoid, according to an analysis by Narvar, which provides technology to help retailers manage post-purchase shipping and returns.

The bracketing and early shopping trends themselves are leading to low inventory, since 37% of shoppers did their shopping earlier this year due to avoid supply chain issues, and 60% of shoppers are bracketing, Narvar said. “What we are seeing is that due to the supply chain issues, consumers started their holiday shopping earlier, but also are bracketing items,” Anisa Kumar, chief customer officer at Narvar, said in a release. “This means that they are buying a variety of clothes in different sizes, colors, and fits with the intent of returning those items but not until the holiday. Early shopping combined with bracketing has contributed to inventory being out of stock.”

In response, Narvar expects retailers to get inventory back in stock by incentivizing quick returns through offers of rewards and special discounts, but warns that businesses will have to work fast to make that work. “After a return is made it is a race to get items back on shelves because the longer it is out of stock, the higher likelihood of the item getting a markdown,” Kumar said. “Where items go after they are returned is very dependent on the retailer, but if retailers can provide consumers with a convenient return drop off option that is close to distribution centers it will make it easier to get items back on their shelves.”

With that goal in mind, Narvar said retailers in 2022 will listen closely to shoppers’ wishes and allow more options for flexible ways to return their orders. For example, the study found that 37% of shoppers returned their last item by mail, but nearly as many—20%—returned items to an alternative drop-off location like a parcel locker or pharmacy, and 15% returned their items to a different designated retailer, such as the agreement that Amazon.com has with the Kohl’s department store.
 

Sure, shoppers are aware of supply chain issues, but other factors seem to be driving holiday purchase behavior even more. #holidayseason #shoppingtrends #BOXpoll https://t.co/A9Wk5IBgn1 pic.twitter.com/awW1mQO426

— Pitney Bowes (@PitneyBowes) December 22, 2021
E-Commerce
KEYWORDS Narvar Pitney Bowes
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Ben Ames is Editor at Large and a Senior Editor at Supply Chain Quarterly?s sister publication, DC Velocity.

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