Consumers Say E-Tail's More Reliable for Last-Minute Holiday Gifts

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Consumers Say E-Tail's More Reliable for Last-Minute Holiday Gifts

By Tamara Saucier, Vice President, Retail Industry Solutions, GT Nexus - 12/23/2014
Historically, local stores and malls could rely on last-minute shoppers to flood their aisles during the final days of the season. But those times may finally be over. With only days left to shop before the holidays, an online study from YouGov and GT Nexus revealed that 61 percent of U.S. consumers surveyed said they would have more trust in online retailers than stores to stock their desired last minute holiday gift item. Tamara Saucier, vice president, retail industry solutions, GT Nexus, shares her thoughts on these findings.

Q. The survey found that only 39 percent of U.S. consumers trust stores more than online retailers to have their last minute gifts in stock. What significant implications should we draw from this?

A: The findings are eye-opening because consumers have historically gone in-store for their last- minute holiday shopping. Despite growth in e-commerce, this was viewed as one of the protected areas of in-store retail. This may no longer be the case. With only days left to shop before the holidays, the study reveals that 61 percent of U.S. consumers would have more trust in online retailers than stores to stock their desired last-minute holiday gift item. If we see last-minute holiday shopping move online, we may see larger-than-expected post-holiday markdowns in local stores. This is a nice scenario for shoppers, but for retailers who depend on the holiday season to reach their annual sales numbers, it's a major concern.

I think a few things happened this year to lead up to this point:
  • Retailers started early this year to get their goods in stock for the holidays to avoid last year's shipping issues and in recognition of the West Coast port delays. This could leave them vulnerable to volatile shifts in buying patterns.
  • From the consumers' point of view, shoppers are smarter this year and don't seem to be waiting till last minute to order. Online numbers are up more than expected, which is a sign of consumer confidence in the model.
  • The parcel carriers are much more prepared and are requesting better forecasts from retailers to plan accordingly.
  • Big picture, the survey shows consumer really trust online more than physical stores to have stock. Which shows online shopping has come a long way. Not surprisingly, the confidence in the store is low. This is likely due to last year's low inventory levels and the general acceptance that if consumers go to the store too late in the holiday, they find the shelves are shopped bare.
Q: Does this signal a shift in consumer power and influence?

A: Consumers are clearly in the driver's seat. It's less of a shift and more of an acceleration of the trend. This certainly places more pressure on retailers as they struggle with inventory visibility and agility. The ability for retailers to offer and fulfill e-commerce orders in time for the holidays can make or break their entire year. Traditional and e-commerce retailers really have to have a handle on their inventory and be able to act with agility and flexibility to meet consumer demand. If they don't, they will be forced into promotions and markdowns that eat into their margins.

Q: How do the U.S. findings compare globally? Did other regions see similar results?

A: The findings were surprisingly similar in other markets. In the UK, 65 percent of respondents who expressed their opinion said they trust online more, and 55 percent of German consumers said they also have greater confidence in online retail. In France, consumers were asked specifically about guaranteed delivery, and 67 percent said they would trust guaranteed delivery from an online retailer just three days before Christmas. This is interesting considering all of the negative stories we heard last year about failure to deliver on time.

Q: What advice would you give to retailers that are struggling with holiday inventory management this year?

A: This isn't just a holiday inventory problem for retailers. It's a yearlong inventory issue that's being magnified at holiday time. The global expansion of commerce has brought overwhelming complexity to today's retailers by introducing long, extended supply chains that involve countless suppliers, manufacturers, and transportation providers. Today's retailers need to look upstream in the supply chain network to solve inventory problems. The decisions made there involving cost and service have rippling effects all the way down to the store level. Yet, this upstream focus remains dark, uncertain territory for many, and is the single greatest challenge in this new era of volatile demand.


Tamara Saucier is vice president, retail industry solutions, GT Nexus.

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