Retailers have made it through the 2021 holiday season despite challenges with the omicron variant and lingering supply chain issues. Overall sales increased 8.5% year-to-year during the period November 1 to December 24, 2021, based on Mastercard data. In addition, store traffic only decreased 19.5% compared to 2019 for the six weeks from November 21, 2021 to January 1, 2022, a significant improvement compared to the 33.1% decrease in 2020.

“It’s a different landscape this year from last year, which was different from the year before,” said Peter McCall, senior director, Retail Consulting and Advanced Analytics at Sensormatic in an interview with Retail contact points. “You have 60% of the vaccinated country and there are no more restrictions – for the most part – that impact retail sales from foot traffic. The other complicating factor is that you have consumers who are incredibly aware of the challenges of supply chain, inventory, and shipping. Ultimately we see it as a successful season.. “

While analysts are still researching the full extent of the successes and sticking points of the 2021 holiday season, some patterns have already emerged. Key takeaways from the holiday season that will impact the start of 2022 include:

• Retailers are more adaptable to in-store purchases: Maintaining a safe but compelling in-store experience has been a challenge since the onset of the pandemic, but the combination of curbside options and informed in-store protocols has smoothed the experience;
• The gifts arrived to buyers in time for Christmas: While exact numbers are not yet available, shipping delays weren’t as prevalent as had been feared, and a combination of early purchases and smart shipping times ensured that everyone had the chance to get gifts on time; and
• Retailers should prepare for returns: UPS has indicated that it expects to handle 60 million returns until January 22, a ten% increase from last year, and retailers need to prepare for the portion of shoppers who prefer to make their returns in a physical store.

BOPIS and better protocols have attracted brick and mortar buyers

The increase in traffic from 2020 has shown that shoppers are starting to return to stores. The 10 best days of the season represented 35.8% of total seasonal traffic, indicating that customers were comfortable in stores even during their busiest times, such as Black Friday. The success of the brick and mortar throughout the holiday season is a testament to the extent to which retailers have developed their safety protocols over the past 18 months.

“While we’ve seen the new variant continue to spread over the holidays, overall that hasn’t seemed to deter the majority of consumers who have popped into physical stores.“said Keith Jelinek, managing director of Berkeley Research Group in an interview with Retail Contact Points. “Consumers have become more comfortable with local restrictions on masks and occupancy issues, and retailers have done a great job of providing a safe environment for both consumers and employees. “

Not surprisingly: A Sensormatic consumer sentiment survey in October found that 65% of consumers planned to shop in-store for product-related reasons, such as researching gift ideas or feeling products before buying.

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

Even buyers who still don’t want to risk the crowds have better tools for using physical options. Sensormatic has found that 42% of holiday shoppers planned to take advantage of BOPIS and 44% curbside pick-up in 2021, a 10 percentage points bump of the 33% who cited BOPIS and 32% use the sidewalk in 2020.

Delays were not a problem thanks to early buyers and last minute efforts

Despite some concerns over whether last mile delays would lead to frustrated buyers and missed holiday deadlines, preliminary reports appear to show that has not happened. The early beginnings of shoppers, the growing online shopping capabilities of retailers, in-store pickup (BOPIS), and early shipping times allowed almost everyone to get what they needed when they needed it. need.

“There was a lot of pre-holiday concerns about whether UPS, FedEx, and USPS would be able to handle the increased volumes,” Jelinek said. “I think the early planning that occurred between retailers to manage and fulfill orders, and working closely with their contracted carriers with demand plans, helped avoid a major disappointment. While chatting with our customers, we haven’t heard of many circumstances where orders were significantly delayed before Christmas.. Overall, even with significant transportation and labor issues in the supply chain, it seems most retailers were able to avoid what could have been a disaster. “

The start of the shopping season is partly responsible for this success story: 50% of people surveyed by Sensormatic said they started shopping before the end of October, compared to 32% in 2020. However, that didn’t mean all purchases were completed early: six of the seven the days leading up to Christmas were among the 10 busiest days of the year.

Shipping companies put everyone on deck at the end of the season, adding more workers and changing routes to make sure everything arrives on time. Many experts have reported seeing companies using vehicles other than their normal delivery trucks to ensure they can keep track of volumes.

“The UPS guy who’s coming here is the same guy who’s been coming for 15 years,” said Keith Phillips, President and CEO of Voxware in an interview with Retail Contact Points. “We know each other [and] he doesn’t live too far from where I live, so when he gives birth we usually end up standing in the aisle chatting for 15 minutes. This year, right after Thanksgiving until Monday of this week, I never saw him. They were different people driving personal vehicles with a UPS flag flying on them. They seemed to have had a large number of last mile delivery guys to help with the volume. “

Higher sales will translate to higher return volumes in early 2022

A successful holiday season is always great news for the industry, but it also comes with a challenge in the form of feedbacks. The record reported by UPS is just the expected result of a year with many online sales, which continue to generate higher return rates than in-store sales, especially in the apparel and clothing industries. the shoe.

Retailers will want to encourage as many in-store returns as possible, assuming they have user-friendly processes to manage them. In-person returns not only offer lower costs; they also provide the option to sell buyers the items they actually want.

“Stores are a cheaper way to return items because retailers potentially have nothing to ship anywhere and could potentially sell the returned item straight to the shelves,” said Nikki Baird, vice president of retail innovation at Aptos in an interview with Retail Contact Points. “It also gives the retailer the ability to turn that return into an exchange or a new sale, thereby offsetting the return. To that end, retailers need to think about a process that balances the customer’s need for efficiency in returning something to the store versus being able to invite them to shop before finalizing that return.

Not all items are suitable for quick resale, and retailers will need to figure out how best to handle the peak in post-holiday returns without hurting bottom lines. A key technology will be RFID, according to McCall of Sensormatic. Returns can become “messy” whether they are put back on the shelf or at the supplier, and RFID systems can reduce costs by keeping everything in order.

With that said, there isn’t just one process that will work for every business. Phillips of Voxware suggested that each retailer look at their own returns process and determine which technologies will provide the greatest return, whether that is automating parts of the process, increasing employee tasks with solutions like RA or to find more efficient ways to get the goods returned. where they need to be.