Ecommerce sales are primed to reach $200 billion this holiday season, but retailers’ distribution centers and logistics partners do not have the physical capacity to support the much-needed holiday sales, according to new research from BRG.
“Online purchasing that accelerated last spring as a result of the pandemic shows no signs of slowing,” said Richard Maicki, a managing director in BRG Corporate Finance who specializes in performance improvement. “With COVID-19 cases still rising, this trend has staying power—meaning smart retailers and their logistics partners must develop plans to be ready for the holiday season.”
The pandemic is primed to supercharge holiday ecommerce, which was already increasing. Before the pandemic, holiday ecommerce sales were to increase 13 percent to $155.5 billion, up from $137.6 billion in 2019. But after record ecommerce volumes in recent months, the projected increase is now 45 percent to $200 billion.
“The projected ecommerce increase is an opportunity—but it is also a warning to retailers not to rely on traditional strategies like Black Friday deals, holiday decorations and promotions to drive in-store traffic,” said Drew Goins, a consultant in BRG’s Retail Performance Improvement team. “Given the uncertain landscape that we face, retailers need to plan for multiple scenarios—including problems for logistics carriers like those we saw in the early days of the pandemic.”
To prepare, organizations must build strategies around how this unprecedented holiday season could affect promotional plans; inventory management and access to store inventory; the broader market and competitors; and shipping networks.
