Q4 2021 Market Watch: Holiday Peak Season Part 2

November 23, 2021

The customer is king, and the stakes are high. Can shippers deliver?

Flexe boxes ecommerce fulfillment web resources 3000x1690

The Black Friday / Cyber Monday (BFCM) weekend is in a matter of days. Yet, supply chain disruptions persist, which raises the question—what’s next for the 2021 holiday season?

Key Takeaways

  • November and December sales will rise between 8.5% and 10.5% YoY
  • Online out-of-stock notifications are up 172% YoY
  • Consumer prices are up 6.2% YoY
  • Two-thirds of retailers will offer same-day delivery by the end of 2021

Supply chain disruptions are no secret; port congestion, labor shortages, and delivery delays make headlines every week. As the Black Friday / Cyber Monday weekend approaches, retailers and brands grapple with how products might not make it to shelves. Consequently, 61% of consumers began shopping for the holidays ahead of BFCM to get the products they want on time. But as in-store Black Friday shopping makes a comeback, consumers and retailers alike face implications from potential stockouts.

Supply chain bottlenecks drive inflation #

A national labor shortage, limited capacity, and higher logistics costs inevitably increase consumer prices—inflation at its finest.

Shippers aim to satisfy shoppers, despite Q4 challenges #

Walmart, Amazon, Best Buy, Costco, Lowe’s, Target, and Wayfair are among retailers that implemented pre-Black Friday promotions to encourage shoppers to buy early. And businesses are expanding their fulfillment operations to meet customer expectations better.

Two-thirds of retailers will offer same-day delivery by the end of 2021
Bringg, 2021

But each of these offerings requires a different labor mix: In-store associates, warehouse fulfillment workers, last-mile delivery drivers. Big retailers are offering higher pay, access to education, and other benefits to attract and retain talent during the peak season. However, a diluted labor pool presents additional challenges:

Consumers embrace omnichannel retail #

Despite ongoing supply chain challenges, BFCM sales will increase in comparison to 2020. Holiday shoppers plan to use a mix of eCommerce, in-store, and curbside pickup options during peak-shopping weekend.

64% of holiday shoppers will shop in-store on Black Friday
NRF, 2021

But can retailers deliver? Ongoing supply chain disruptions through the end of Q4 threaten shippers’ margins and customer satisfaction.

Out-of-stock notifications are flooding consumers, up 172% since this time last year and up 360% since 2019
Adobe, 2021

Looking ahead #

BFCM is days away. Shoppers face stockouts and inflated costs; retailers face ongoing supply chain bottlenecks. Multiple fulfillment options (BOPIS, curbside, in-store, eCommerce) increase the chances of inventory miscalculations. Beyond peak season, omnichannel retail growth increases the need for capacity—labor, warehouse, and transportation. However, supply is limited, and the long-term effects of inflation will be telling.

Reports on Black Friday / Cyber Monday performance typically come out in December, so stay tuned for results and key learnings from the peak-season shopping weekend.

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