Black Friday is 2020, so welcome to the longest holiday shopping season yet

For years, American shoppers flocked to the stores on Black Friday, the day after Thanksgiving, when deals were as plentiful as drivers clogging up the roadways to get to their favorite stores.

Then came Cyber ​​Monday, the Monday after Black Friday, when online deals dominated the shopping universe. On July 15, 2015, Amazon changed the equation again with its first-ever Prime Day. Walmart (NYSE: WMT) and target (NYSE: TGT) were soon followed by special online sales days.

This year, the three retail giants added another online sales promotion, each promoting special offers in the previous week. And with more retailers promoting sales this year, both online and in-store, to reduce overstocking and boost sales ahead of the holidays.

Is this the end of the traditional holiday shopping season as we know it? Black Friday may never be the same.

Consumers drive change

“This year is different. There’s actually a consumer push,” explained Johnson Ma, senior vice president of operations Shippo. “Last year it was the supply chain [disruptions] … which caused different behavior. We saw this last year, with peak season demand extending well into September. Inflation and planning is the name of the game this year [consumer] budgets are spent on these purchases. I think it’s very interesting.

“If a consumer spent $20 of their $100 budget, the retailer wants that $20 spent with them,” he added. “Traders don’t like these spikes, but that’s what happens traditionally.”

Data collected by Bank of America found that Amazon (NASDAQ: AMZN) last week’s 48-hour Prime Early Access sale didn’t match the success of the summer event, but still brought in an estimated $5.7 billion. Countermarket research firm, said the average order was $46.68, down from $60.29 during the summer Prime Day event.

A push to reduce inventory

Analysts polled by CNBC said the event accomplished one goal — reducing overstocking at Amazon warehouses. Ma said Amazon is not the only one facing this problem.

“They have to get rid of that stock by Dec. 25 because Dec. 26 is when they get any markdowns. [even worse]” he said.

Ma noted that retailers have been trying for years to push holiday shopping — seeing Christmas decorations in stores in early fall — but have seen only “little success.” Massive supply chain disruptions over the past few years, however, have helped change consumer behavior.

Shippo is seeing slow volume growth on its network, but not the same surge that was common 5-10 years ago.

“This year is very similar to last year,” he said. “Two years ago, in 2020, there was a lot of news about delays and bandwidth issues. And last year we almost didn’t see it. I think it’s a combination of powers that have been more evenly distributed over the last few months. In terms of the actual logistics and how it affects the carriers themselves, I don’t see much newsworthy here.”

Ma said he sees supply chains mostly “normalized” for now, and carriers are able to handle this year’s volumes.

Peak season hiring is down

Both carriers and retailers are still looking to hire seasonal workers, but are doing so at lower rates than in previous years. The US Postal Service expects to hire approx 30% fewer seasonal employees this year compared to 2021, and Walmart is counting on it bring on board 73% less.

“Peak season was a topic of wide discussion among truckers at our recent Laguna conference, with TL and LTL agreeing that peak season will more accurately reflect 2018-19 than 2020-21,” Morgan Stanley wrote in a recent report. “Following these announcements from retailers and parcels, it is clear that no major retailer/e-commerce player is expecting an increase.”

The last mile delivery market has started to see some changes as brands look to reduce shipping costs. survey, Holiday Shopping Trends Report: Winning Customers Despite Uncertaintyconducted by Auctane and Retail Economics for ShipStation and published last week, found that 91% of merchants said they expect business spending to be higher this holiday season, with The cost of delivery increased by 34.7% and another 26.2% extend delivery times in response. Another 10.1% opt out of free returns, a particularly troublesome cut for consumers who buy apparel, which returns at a much higher rate than other items.

Communication with customers

Ma said that when merchants increase shipping costs or slow down delivery times, it’s important that they communicate with their customers. This includes brands that offer sustainable shipping options.

“[There’s] there are many more discussions around sustainable development,” he said. “As consumers become more educated and have choices, there will be several surveys showing that when given a choice, they will choose sustainability in their shipping.”

Ma reiterated that Shippo is seeing some increased shipping volume, and that could smooth out the traditional Black Friday and Cyber ​​Monday peaks. Those increased volumes are likely to continue into January as retailers deal with the “return season,” he predicted. But it’s something the industry has to deal with this year.

“I think over the last few months the capacities are more evenly distributed and they’ve all been increased to some extent,” he said.

Click to see other articles by Brian Strait.

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