By July, the most prepared retailers are already planning for the holiday shopping season. To learn more about what retailers are preparing for leading up to the 2024 holidays, Digital Commerce 360 surveyed a panel of 23 online retailers.
Their annual online revenues vary from a range of $1 million to $2.5 million, to $15 million to $19.9 million, to over $100 million — and in between. They also have anywhere from 1 to 100 employees, to more than 500 or 1,000 employees.
More than half of respondents (57.14%) said they were in a good position for the holidays in terms of inventory. At the same time, half were uncertain about their inventory position, saying they were dependent on the supply chain. Moreover, they don’t expect to know how strong their inventory positions will be until they get closer to the holiday shopping season.
Anticipating consumers’ online holiday shopping behavior
More than half of Digital Commerce 360’s panel of retailers (53.85%) said they anticipate two key trends:
- High inflation will cause consumers to purchase less overall this holiday season.
- Consumers will comparison shop more this year, bringing down conversion rates.
Nearly half of the panel, 46.15%, said they expect consumers to buy more on marketplaces this holiday season. Along that same wavelength, 15.38% of the panel said:
- Prime Day in July‘s timing will reduce shopping during the traditional holiday season (November and December).
- Consumers will concentrate their shopping even more on Amazon.
- Consumers will buy earlier in the season to avoid out-of-stock products.
Meanwhile, the same share of the panel (15.38%) expects that consumer behavior and expectations will be the same as in any other year.
How will holiday sales be this year compared to last year?
Most respondents said they expect holiday sales growth this season.
Breaking that down, more than half of respondents expect growth up to 24% (53.85%). Some are more optimistic, expecting sales growth of 25% to 49%, or 50% to 74% during the holidays (7.69% selected each).
On the flip side, 7.69% expect sales to decrease year over year during the holidays, down 11% to 24%, or down 25% to 49%.
Just 15.38% project their online holiday sales in 2024 to be flat.
What obstacles do online retailers expect during the 2024 holiday shopping season?
The top three challenges retailers anticipate leading up to the 2024 holiday shopping season are all tied to their bottom lines.
Two-thirds of the panel (66.67%) is concerned about rising inflation rates, and the same amount cited increasing costs as an obstacle. In line with that, more than half (58.33%) cited meeting profitability goals. And half expect challenges managing their marketing budgets.
A quarter of respondents cited:
- Competition from Amazon
- Online platforms changing privacy policies, such as regarding third-party cookies
Contingency is key for supply chain management
The panel of retailers indicated that they want to be prepared for any disruptions to their supply chains during the 2024 holiday shopping season. That starts with monitoring, according to half of the respondents, who said they want to use technology to monitor deliveries and supply chain disruptions.
As a result, 30% said they have or will:
- Make alternative manufacturing plans
- Make contingency plans in case they face disruptions in obtaining goods
- Work with suppliers and transportation providers to minimize disruptions
Similarly, 20% said they’d order more products from existing suppliers. And 10% said they’d order from suppliers in more countries than they had ordered from in the past.
Staffing for the 2024 holiday shopping season
It’s not easy to staff for the holiday season, these online retailers say. Half of the respondents said they plan to hire employees for their fulfillment center and/or customer service department.
But that could be a challenge, as 30% said they expect to have trouble finding holiday workers. The same amount said they will provide incentives to secure holiday staff, or that they plan to outsource at least some holiday fulfillment work to third-party logistics companies.
A small portion of respondents, 10%, said they have already begun hiring holiday staff.
Approaches to free shipping
A third (33.3%) of paneled retailers said they intend to offer free shipping with a minimum spending threshold or on specific categories. And more than a fifth (22.22%) said they will only offer free shipping during heavily promotional periods, such as around Thanksgiving or the Cyber 5 as a whole.
Approaches to free shipping vary going into the 2024 holiday shopping season. Whereas some retailers plan to offer unconditional free shipping, others will only offer it to shoppers who agree to wait longer to receive their online orders. Additionally, some retailers plan to increase their threshold for free shipping compared to last year. Meanwhile, others will only offer it with a loyalty program — or only with a paid membership program.
And for those retailers that do choose to offer free shipping, just over a fifth plan to offer next-day or two-day delivery.
Moreover, none of the retailers in the panel said they would offer same-day delivery, whether customers were to pay for it or not.
When it comes to returns, less than half of the panel plans to offer it for free (44.44%). But two-thirds will extend their return deadlines this holiday season.
Competing with Amazon
When it comes to online retail, almost everyone’s competing with Amazon for sales. That might be even more the case during the holidays than throughout the year.
The two biggest ways paneled retailers plan to compete with Amazon this holiday shopping season are through loyalty programs and lower prices (44.44% cited each).
Meanwhile, a third of respondents cited a variety of other approaches, including:
- Free shipping (a staple of the Amazon Prime membership program)
- Faster delivery (another staple)
- Offering a unique or curated product selection
- Upgrading on-site content to better educate shoppers
- An upgraded, more personalized customer experience
- Expanding or better executing on omnichannel features
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