A supply chain crisis may force last-minute holiday shoppers to choose online stores for gifts – CBS Boston

Dubai, United Arab Emirates (CNN) – A supply chain crisis means last-minute gift buyers may have no choice but to go shopping the old-fashioned way this holiday season.

High demand, combined with supply chain delays, material shortages and labor recruitment issues, is slashing the availability of items online and in stores. With customers nearing the last minute, physical stores will become a more attractive option for shoppers than waiting for delivery, analysts predict.

Even if customers can’t find exactly what they’re looking for in a store, it’s usually easier to look for an alternative in person – and they can try it out.

“Bricks and mortar may be more attractive to consumers later in the season,” Rod Sides, vice president of Deloitte and head of US retail and distribution practices, said in an email. “Shoppers can leave with merchandise on hand, in exchange for waiting on promised dates from shippers.”

Consumers viewed more than 2 billion unavailable messages while browsing the Internet in October, according to Adobe Analytics. That’s a big reason why in-store sales are up 8% this year — a 10-year high — as shoppers return to shopping in person and try to avoid shipping delays, according to real estate research firm CBRE.

Analysts also believe that online purchasing, and in-store pickup will thrive this holiday due to shipping concerns.

Shoppers will rely on curbside pickups “more than ever to give them peace of mind about their holiday purchases” with wait times and under-used items in consumers’ minds, said Andrew Lipsman, a retail analyst with market research firm Insider Intelligence.

Lipsman expects retailers to heavily promote pickup as an option to customers on their websites and mobile apps, in marketing emails, and on television to attract customers worried about buying online late in the season.

Stores say they have more control over in-store inventory and curbside pickup than home delivery — meaning there is less likely to be an error or delay in ordering.

“I approached [to the holiday]I will definitely use the ship for storage because that will give more confidence in being able to get the thing at the right time.”

When customers order online and pick up their items from stores, the products are either already in store or REI dispatches them from one of their warehouses using their own trucks. This means REI doesn’t need to rely on third-party delivery companies that it has less control over to get it delivered to customers’ homes, he said.

$5 off orders and free blankets

Retailers have an incentive to attract shoppers to their stores.

It is usually more profitable for retailers to have you shop in person rather than ordering to your home because they have to pay expensive last mile delivery costs. Return rates are also higher for items purchased online, and retailers have to factor in the costs of customer returns.

This year, major retailers are paying customers to visit their physical stores to shop or order online and collect their items in person.

Kohl’s is offering customers a $5 discount on orders when they pick them up in stores. It is also trying to make the pickup process smoother for customers by adding new temporary pickup locations and more parking spaces for pickups, as well as a self-pickup test where customers can access their orders with a link and code.

Paul Gaffney, Kohl’s chief technology and supply chain officer, said in an email that Kohl’s expects demand for pickup orders to increase this year in part because it “removes the added stress of waiting for packages to arrive at your doorstep.”

Children’s clothing chain Carter’s gives customers gifts as an added benefit if they purchase items on certain days in stores – but not online – such as blankets from November 19 to November 21 and Skip Hop from December 10 to December 12.

Randa Apparel & Accessories, which sells brands like Levi’s, Tommy Hilfiger, Calvin Klein and others, has shifted a large portion of its advertising spending to driving customers into stores, rather than buying online. It also directs its inventory more to stores than to e-commerce.

“When inventory is limited, we prefer getting consumers to buy in-store rather than online,” said David Katz, Randa’s chief marketing officer.

Customers who buy products in stores make more profit for Randa than online sales, which often come with “very large reverse logistical costs” when requests for returns. “We paid the tuition for this education, and it was an expensive lesson to learn,” he said.

When shoppers come to stores, they also tend to make impulse purchases or purchase related items nearby – belts, for example, near the pants they buy. This happens less frequently when purchasing online.

In general, Katz said, “the level of frustration is lower when you go into mortar and brick, especially when stock is limited.”

CNN Wire
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