Are warnings of empty shelves this Christmas at leading retailers simply to encourage shoppers to buy early?

* 5 min read

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Leading up to the Christmas period, our Packaging Evolution Champion Kevin McAulay examines supply chain resilience and looks at which brands and retailers are set to ‘make or break’ during this critical trading period.

 

 

The Covid-19 pandemic has already changed the way many of us shop. There has been a massive up-tick in ecommerce, click & collect and home delivery services. As demand ‘sky rockets’ in the run-up to Christmas, how are retailers dealing with more unpredictable shopping behaviour?

With Christmas 2020 curtailed by Covid-19 disruption, many are predicting consumers will want to make Christmas extra special this year but headlines reporting HGV driver shortages and concerns over Christmas stock levels have led almost half (48%) of consumers to begin Christmas shopping earlier according to a survey by Sitecore. 1

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Image source: Staveley Head 

Consumers buying early to avoid disappointment could add further pressure to the fragile supply chain creating a mismatch between consumer demand and retail’s ability to supply. The fear of missing out has already led to spikes in seasonal sales – for example, sales of frozen Christmas food have risen sharply at retailers like M&S and Iceland as the risk averse act quickly.

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Grocery chain Iceland says sales of frozen turkey are up by 409% year on year and mince pie sales are up 10% as people prepare earlier than usual for Christmas.2
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There is a similar pattern emerging at John Lewis who reported sales of its Cotswold artificial trees up 1,300% in the first three weeks of September compared with last year and sales of neon lights up more than 2,000%.3

Purchases of big traditional seasonal items such as trees, lights and turkeys are usually only made once, so consumers rushing to buy early will just stretch demand, but as we near the big day, might we see a return to panic buying? Shoppers normally rely on readily available stocks of perishables and fast moving consumer goods, knowing an out-of-stock will be replenished quickly, but if the shortage of drivers and staff limits a retailer’s ability to restock or to fulfil an online order or indeed to deliver it, then what? Is this when we see a return to panic buying and stockpiling? Retailers insist there is enough for everyone but whether consumers trust what they are being told is another matter. It took weeks of panic buying fuel before supply came back under control despite government and industry assurances.

The real crunch time will come when consumers try and buy the toy of the year and can’t. Recent trends in ecommerce have trained consumers to expect rapid delivery as a matter of course and the expectation that what they want will be available, affordable and easy to get hold of will only add to their frustration when faced with low stock levels, poor choice and slow delivery options. Some retailers are advising consumers to buy early, others are actively bringing their festive trading period forward, but unlike in 2020, the issues facing retailers now are not about accessing stock so much as delivering that stock the last few miles to store and/or direct to consumers. Even ecommerce giants like Amazon are warning of disruption to deliveries as they seek to recruit 20,000 temporary staff to help meet demand and are beginning a campaign to promote early ordering across their website and App.4

wicked monday jxhM5Ni46zw unsplashImage Source: Unsplash - Wicked Monday

Some analysts are predicting that consumers will avoid big online retailers this Christmas and visit local small businesses to avoid complications and stress. Only time will tell but the winners will be those that can manage demand and expectations. How the brands and retailers communicate with their consumers will play a valuable part in how their customer experience is rated. Cox & Cox have already warned customers that stock may run out before Christmas; “…expecting to sell out of most of our Christmas lines much earlier than usual due to low availability elsewhere in the market.” In an email from the CEO, he explains the Company wants to “…give customers a heads up, first dibs, and recommend that if you have seen something you want, that you don’t hang around”. The friendly tone and style of this message cleverly steers consumers to buy early whilst managing expectations and building trust with the brand.

Many big names are already committed to their Christmas advertising and marketing campaigns and they will need to remain agile and be able to optimize messaging at a local level to avoid misrepresenting stock levels and availability and disappointing consumers. Sun Strategy’s investment in cutting-edge intelligent automated artwork systems helps clients by optimizing packaging and marketing to react instantly at a local level and helps maintain good customer relations at this critical trading period.


About the author

imageedit 1 6168940299Kevin McAulay - Account Director

Kevin has over 20 years experience in managing print and graphics for multiple global FMCG and retail companies. Kevin has experience working onsite at a number of clients sites including Nestle and Unilever and managing remote teams, with a great understanding of stakeholder engagement across multi disciplines.

What’s your experience? Join the conversation on LinkedIn.

References

  1. Bloomberg Oct 2021
  2. The Guardian Oct 2021
  3. The Guardian Oct 2021
  4. The Independent Oct 2021