Advertisement

Holiday 2021 Wrap-Up: Safety Protocols and Early Shopping Led to a Successful Season

Share on linkedin
Share on twitter
Share on facebook
Share on reddit
Share on email

Retailers pulled off a successful 2021 holiday season despite the challenges posed by the omicron variant and ongoing supply chain issues. Overall sales were up 8.5% year-over-year during the period from Nov. 1 through Dec. 24, 2021, according to data from Mastercard. Additionally, in-store traffic was down only 19.5% compared to 2019 for the six weeks from Nov. 21, 2021, through Jan. 1, 2022, a significant improvement over the 33.1% drop in 2020.

“It’s a different landscape this year than last year, which was different than the year before,” said Peter McCall, Senior Manager, Retail Consulting and Advanced Analytics at Sensormatic in an interview with RetailTouchPoints. “You’ve got 60% of the country vaccinated and there are no more restrictions — for the most part — that are impacting retail foot traffic sales. The other complicating factor is you’ve got consumers who are incredibly aware of the supply chain, inventory and shipping challenges that are out there. At the end of the day, we view this as a successful season.”

While analysts are still researching the full extent of the 2021 holiday season’s successes and stumbling points, some patterns have already emerged. Key takeaways from the holiday season that will have an impact on early 2022 include:

  • Retailers are better at accommodating in-store shopping: Maintaining a safe yet compelling in-store experience has been a challenge since the pandemic hit, but the combination of curbside options and educated in-store protocols smoothed out the experience;
  • Gifts made it to shoppers in time for Christmas: While the exact numbers aren’t available yet, shipping delays weren’t as widespread as feared, and a combination of early shopping and smart shipping deadlines made sure everyone had a chance to get their presents in time; and
  • Retailers should brace for returns: UPS has reported that it expects to handle 60 million returns through Jan. 22, a 10% increase over last year, and retailers need to prepare themselves for the share of shoppers who prefer to make their returns at a brick-and-mortar store.

BOPIS and Better Protocols Drew in Brick-and-Mortar Shoppers

The rise in traffic compared to 2020 showed that shoppers are starting to return to stores. The top 10 days of the season accounted for 35.8% of total seasonal traffic, indicating that customers were comfortable at stores even during their busiest times, like Black Friday. The success of brick-and-mortar across the holiday season is a testament to how far retailers have developed their safety protocols over the past 18 months.

Advertisement

While we have seen the new variant continue to spread right through the holidays, all in all it did not seem to deter the majority of consumers that went to physical stores,” said Keith Jelinek, Managing Director at Berkeley Research Group in an interview with Retail TouchPoints. “Consumers have become more comfortable with local restrictions on masks and any occupancy issues, and retailers have done a great job of providing a safe environment, for both consumers and employees.”

This comes as no surprise: an October Sensormatic consumer sentiment survey found that 65% of consumers planned to shop in-store for product-related reasons such as seeking gift ideas or feeling products before they buy.

“The consumers’ concern about health and safety is still there, just like it was a year ago,” said McCall. “What’s different is that we figured out how to comfortably handle that. We’ve learned a lot. We appreciate the physical experience of brick-and-mortar and the value of shopping in-store. These consumer data points are a perfect indicator of this.”

Even shoppers who still don’t want to risk the crowds have better tools for using physical options. Sensormatic found that 42% of holiday shoppers planned to leverage BOPIS and 44% curbside pickup during 2021, a 10-percentage-point bump from the 33% who cited BOPIS and 32% using curbside in 2020.

Delays Were No Problem Thanks to Early Shoppers and Last-Minute Efforts

Despite some concern regarding whether last mile holdups would lead to frustrated shoppers and missed holiday deadlines, preliminary reports seem to show that this didn’t come to pass. Shoppers’ early starts, retailers’ growing buy online, pick up in-store (BOPIS) capabilities and early shipping deadlines made sure that almost everyone got what they needed when they needed it.

“There was a lot of concern going into the holidays whether UPS, FedEx and USPS would be able to handle the increased volumes,” said Jelinek. “I think that the early planning that occurred between retailers to manage and process orders, and working closely with their contracted carriers with demand plans, helped to stave off significant disappointment. In speaking with our clients, we have not heard of many circumstances where orders were significantly delayed getting on the doorstep before Christmas. All in all, even with significant supply chain transportation and labor issues, it seems like most retailers were able to avoid what could have been a disaster.”

The early shopping season was partly responsible for this success story: 50% of those surveyed by Sensormatic said they started their shopping before the end of October, compared to 32% in 2020. However, this didn’t mean all shopping was finished early: six of the seven days leading up to Christmas were among the top 10 highest traffic days of the year.

The shipping companies put all hands on deck at the tail end of the season, adding more workers and shifting routes to ensure everything arrived in time. Multiple experts have reported seeing companies use vehicles other than their normal delivery trucks to ensure they could keep up with volumes.

“The UPS guy that comes here is that same guy that’s been coming for 15 years,” said Keith Phillips, President and CEO of Voxware in an interview with Retail TouchPoints. “We know each other [and] he doesn’t live too far from me, so when he delivers we usually end up standing in the driveway chatting for 15 minutes. This year, from right after Thanksgiving until Monday of this week, I never saw him. It was different people driving in personal vehicles with a UPS flag flying on it. They seemed to have had a large core of last mile delivery folks to help with the volume.”

Higher Sales Will Mean Higher Return Volumes in Early 2022

A successful holiday season is always good news for the industry, but it also carries a challenge in the form of returns. The record reported by UPS is simply the expected outcome of a year with plenty of online sales, which continue to generate higher return rates than in-store sales, particularly in the apparel and footwear sectors.

Retailers will want to encourage as many in-store returns as possible, assuming they have customer-friendly processes to handle them. In-person returns not only offer lower costs; they also provide an opportunity to sell shoppers items they actually want.

“Stores are a lower-cost way to return items, because retailers potentially don’t have to ship anything anywhere and could potentially sell the returned item straight off the shelf,” said Nikki Baird, VP of Retail Innovation at Aptos in an interview with Retail TouchPoints. “It also gives the retailer a chance to turn that return into an exchange or a new sale, offsetting the return. To that end, retailers should think through a process that balances the customer’s need for efficiency in returning something to store versus the opportunity to invite them to shop before finalizing that return.”

Not every item is suitable for a quick resale, and retailers will need to find the best way to handle the post-holiday spike in returns without hurting the bottom line. One key technology will be RFID, according to Sensormatic’s McCall. Returns can get “messy” regardless of whether they go back onto the shelf or back to the vendor, and RFID systems can cut costs by keeping everything in order.

That said, there isn’t one single process that will work for every company. Voxware’s Phillips suggested that every retailer look at its own returns process and figure out what technologies will provide the biggest return, whether that’s automating parts of the process, augmenting employee-facing tasks with solutions like AR or finding more efficient ways to get the returned goods where they need to be.

Advertisement

Advertisement

Access The Media Kit

Interests:

Access Our Editorial Calendar




If you are downloading this on behalf of a client, please provide the company name and website information below: