National study shows COVID’s impact on consumer spending and uncovers key gaps for shippers heading into an unpredictable holiday season
Transfix, a leading transportation solutions provider that is reshaping the future of freight through its digital freight platform and best-in-class carrier network, today announced the findings of a national, two-sided study, The Great Holiday Rewrite: Supply Chain In the COVID Era. The study analyzes changes in consumer behavior ahead of the 2020 holiday season as well as the anticipated impact for brands as they adjust their supply chain strategies. Among the findings, 79 percent of U.S. consumers agree their 2020 spending has been less predictable than in previous years, yet 72 percent of shippers say they lack visibility into key performance metrics needed to inform rapidly changing inventory and transportation decisions. Coupled with gaps in both technology and reliable freight capacity, 72 percent of shippers say they aren’t confident that their supply chain is set up for success heading into the critical holiday season.
“COVID has made for one of the most challenging years in supply chain history, but consumer expectations are still at an all-time high as we head into the most critical season for brands and retailers,” said Ahmad El-Dardiry, Chief Operating Officer of Transfix. “With high stakes and a less predictable market, shipper success will ultimately rely on access to technology, insights and a trusted network of transportation providers to deliver on customer promises.”
Additional key findings from the report include:
Consumers Shifting The “When’s, Where’s and What’s” of Holiday Spending
Continuing a year of unpredictable spending patterns, consumers are also changing their holiday shopping plans with 55 percent planning to shop earlier this year and 87 percent planning to do more of their holiday shopping online than in previous years. In light of travel and entertainment options being limited by the pandemic, consumers expect to spend an average of 54 percent less on holiday travel instead of shifting spend to goods and gifts. More in-home celebrations will yield expected year-over-year bumps in spending across certain categories, including food and beverages (81 percent), paper goods (86 percent) and beer, wine and spirits (72 percent).
Expectations Remain High, But Many Brands Not Prepared To Deliver
Unsurprisingly, 93 percent of supply chain professionals say that 2020 has been the toughest year of their career. Despite the supply chain challenges created by COVID, consumer expectations across channels remain high, with three out of four consumers saying they still expect brands to offer the same delivery timelines as they did prior to the pandemic, and one in four in-store shoppers agree that out of stock products make them less likely to shop with a brand again in the future. Yet only 23 percent of supply chain professionals say they have the technology and tools needed for success and 59 percent say that the tech gap creates an inability to take swift action in rapidly-changing markets. And although 72 percent of consumers say they plan to leverage curbside or buy-online, pick-up in-store options, 73 percent of shippers say internal silos limit cross-channel visibility and make it hard to successfully enable those omnichannel options.
Trusted Transportation Partners Critical For Weathering the Holiday Rush
More than 95 percent of shippers agree that access to both reliable and flexible freight capacity will be among the most important factors for holiday success. However, two out of three say they’re not fully confident in their carriers today. What’s more, shippers today reveal that up to 30 percent of company time is wasted each week finding backup carriers due to tender rejections or missed pickups. Lack of flexibility also poses huge risks in meeting fluctuating levels of consumer demand with 78 percent of shippers saying they struggle to access incremental capacity on-demand. With a lot on the line, fast problem resolution is also at the top of priority lists, as 72 percent of shippers saying lack of proactive exception management increases transportation costs and 43 percent say it poses a risk to long-term success.
“Now more than ever, supply chain agility can be a competitive advantage for brands, but for those who don’t quickly find ways to navigate market volatility, their business could be on the line,” added El-Dardiry.
For additional findings and to download the full report, The Great Holiday Rewrite: Supply Chain In the COVID Era, visit here.