Retailers have increased supply chain anxieties this holiday season.
One in four retailers is worried about the same supply chain issue as the holidays approach.
According to the “2021 State of Shipping Report” from multi-carrier e-commerce shipping software provider Shippo, shipping” was mentioned in 23% of responses from surveyed retailers to the question, “What keeps you up at night when it comes to readying your business for the 2021 holiday season?”
While the results do show that most retailers remain optimistic, more respondents expressed concern about holiday shipping than in 2020. When asked how confident they are that the carriers they use for shipping will keep up with demand amid the holiday season, 41% of respondents were somewhat confident (compared to 47% in 2020) and 23% were somewhat not confident (compared to 18% in 2020). Eighteen percent were very confident compared to 22% in 2020, and 8% were significantly not confident compared to 4% in 2020. Ten percent had no opinion, similar to 8% in 2020.
When asked how has the evolving COVID-19 pandemic impacted their shipping operations, 52% of surveyed retailers said there are more package delays (about the same as 2020), 38% said their supply chain is disrupted (up from 26% in 2020), 36% said more sales (about the same as 2020), 17% said none of the above, 16% said less sales, 8% said more customer complaints, 4% said fulfilling orders has become harder due to safety concerns, and 3% said the number of returns has increased.
A recent studyby First Insight and the Baker Retailing Center at the Wharton School of the University of Pennsylvania indicates that virtually all retailers are facing supply chain issues in the current holiday season, with most expecting problems to last into the new year.
As a percentage of the total order value, 33% of surveyed retailers said they spend 6%-10% on shipping. Another 21% said 11%-15% 16% said 16%-20%, 13% said 1%-5%, 7% said 21%-25%, 5% said more than 30%, and 4.3% said 26%-30%.
Shippo also surveyed consumers about how their 2021 holiday shopping plans compare to previous years. More than four in 10 (43%) won’t change their shopping habits, 34% will do more online shopping, 13% don’t shop for the holidays, and 9% will do less online shopping.
When asked how often they shop online, 25% of surveyed consumers said more than half of their shopping is online, 16% said all or almost all of their shopping is online, 24% said they shop online about as often as they shop in person, 22% said less than half of their shopping is online, and 12% almost never shop online Over the course of the COVID-19 pandemic, close to six in 10 (57%) surveyed consumers said their online shopping habits have increased, 29% said they remained the same and 14% said their online shopping habits have decreased..
Consumers were also asked how often free shipping affects their online purchasing decisions. Thirty-seven percent said they prefer it, but it won’t prevent them from buying. Another 33% said they only purchase online with free shipping, and 19% said they will swap stores for free shipping. One in 10 consumers said they don’t care about free shipping.
In comparison, 31% of surveyed retailers do not offer free shipping, while 29% occasionally offer it, 21% always offer it, and 18% offer free shipping most of the time.