Consumers are ready to shop this holiday season; per Forrester, 25% — or one in four — US consumers expect to spend more compared to last year.
However, as retailers think about fulfilling changing consumer needs, expectations, and behaviors, they face several key challenges head-on as this marks the second holiday season influenced by the pandemic. Forrester analysts are monitoring these obstacles closely and have offered the following tips and insights for retailers (and consumers) on how best to navigate these unprecedented times:
Retailers: Proactively manage your supply chains — Forrester Senior Analyst Alla Valente
- “Leading up to and during the holiday shopping season, retailer organizations can proactively manage their supply chain risks by doing the following:
- Identify and monitor changes in global risk factors that impact tier one and sub-tier suppliers, then create just-in-case contingencies to maintain your resilience.
- Promote or incentivize early shopping on inventory that’s currently available.
- When stock-outs occur, be transparent and timely in communicating the issues and how long it may take to resolve them. It may be wise to push scarce inventory to local stores and to limit the number of units that each shopper can buy to reduce the risk of hoarding.
- If you offer secondhand or refurbished goods in your assortment, promote those to customers who may be looking for sustainable (and available) options.”
Due to chip shortages, plan for a low-tech holiday — Forrester VP and Research Director Glenn O’Donnell
- “As Forrester predicted early this year, the semiconductor chip shortage will persist through 2023. Because these chips are integral components to so many other products, the shortage is causing delays, price increases, and even unavailability of these other products. The holiday shopping season will see items like game consoles, PCs, smartphones, and even toys impacted in ways you won’t like.
- “The big thrust of shopping is generally Black Friday, but consumers anticipated these issues and started buying early. By Black Friday, many of these gifts will be unavailable. General supply chain problems are systemic, which suggests that if you don’t already have the gift you want, there is a low probability you’ll get it in time for the holiday.
- “Plan for the likelihood that this will be a low-tech holiday. Toys and other gifts in the ‘good old days’ were powered by imagination, not tiny computers. A bit of a return to that era will characterize this year’s holidays — a refreshing delight to some and a frustration to others.”
Retailers: Block the bots — Forrester Principal Analyst Sandy Carielli
- “Keeping the most popular gifts in stock will be this year’s retail challenge as the chip shortage creates a backlog for electronics orders and other supply chain disruptions delay shipments.”
- “Retailers: Beware of other fraudulent actors looking to capitalize on the crisis. Bot operators will inevitably cash in on the shortages, deploying bots to hoard and resell prized toys, electronics, and other desirable products. To mitigate the risk to their customers, retailers need to step up their game — quickly.”
More insights are included here.
Use customer experience (CX) to mitigate consumer disappointment — Forrester Senior Analyst Judy Weader
- “This holiday season, customers are looking for brands to provide them with an escape from pandemic fatigue, not a reminder of it, so it’s especially important that brands communicate options and alternatives for harder-to-source products and harder-to-deliver services. For example, Target has a feature in their mobile app that allows customers to select a ‘Backup Item’ for certain products. That sets the expectation that the product may be harder to fulfill and it signals that alternatives exist and can easily be swapped in without the customer having to go through any additional steps after they place their order.”
- “Brands can avoid disappointing customers by clearly setting expectations and solving problems before they happen. For example, we’re seeing retailers pushing holiday deals well in advance of Black Friday, which encourages customers to get ahead of both the crowds and the seasonal overloading of the shipping infrastructure.”
Retailers: Beware of phishing attacks — Forrester Analyst Allie Mellen
- “Retail requires 100% uptime, especially on the weekend leading up to Cyber Monday and, of course, Cyber Monday itself. If retailers are compromised during this time, especially with a ransomware attack, they may be more inclined to make a quick decision like paying a ransom to get back online as fast as possible. It’s important they look out for an uptick in attacks the weekend before and, of course, the day of.
- “We may see an uptick in phishing attacks as an entry point into the enterprise, particularly ones where attackers claim to be customers struggling to make purchases online. In what is sure to be a busy day of requests from customers, attackers may be looking to sneak through with requests by masquerading as frustrated customers and using that entryway to deploy malware.”
Analyst perspectives regarding what to expect this holiday season can also be found here.
To connect further with Forrester analysts, please reach out to firstname.lastname@example.org.