The busiest retail season of them all, the holidays, is just around the corner and this year, the trends impacting suppliers, consumers, and retailers alike are wild. For starters, there’s a massive labor shortage for retail workers, which impacts everything from price to in-store execution. Then, there’s rising inflation squeezing consumers’ wallets. How shoppers and retailers are dealing has massive implications for suppliers’ retail strategies to make sure that this year’s sales are a success and goals are met.
Keep reading to learn more about the trends and what suppliers can do to have a thriving season.
Trend 1: Retail Hiring Shortages
This is the biggie. It’s a tight labor market for retail workers and that doesn’t seem to be slowing down anytime soon, especially not in time for the holiday rush. In fact, 74% of retail executives report that this year their biggest pain is at the store level, with massive shortages in customer-facing positions.
This macro trend will have major implications for suppliers, depending on how their retail partners choose to cope. Before we dive into a few ways those reactions could play out, and their implications, the major takeaway from this trend is that suppliers will need to have a plan to make sure their in-store inventory is taken care of. With fewer retail workers on the floor, those that are there will be busier than ever.
Trend 2: Volume Recruitment
Speaking of hiring shortages, one of the ways many retailers are coping is by embracing volume recruitment. This looks like eliminating as many steps in the hiring journey as possible to hopefully speed up the process and get more people in the door.
However, this comes with its own challenges. While there may be more people in the door, it doesn’t mean they’re quality candidates who will help suppliers’ inventory sell. It also doesn’t mean that it’s solving a high employee churn rate.
Retailers are sure to sort this out over the long run as they hone in on their needs and what qualities make for long-term candidates but that doesn’t solve the immediate challenges facing retailers and suppliers this holiday season. Suppliers still need a way to make sure their inventory is managed in-store by highly trained professionals.
Trend 3: Shortage of Candidates and Recruiters is Here to Stay
Compounding the hiring challenge is that there’s not just a shortage of candidates, there’s a shortage of recruiters – nearly 7 times the number of vacancies that there were in 2020. This means that the whole talent pipeline is being squeezed.
But what’s driving the trend?
The pandemic forever shifted how people view work. And in a more competitive labor market, $15 an hour isn’t enough to attract and retain top talent. But it’s not just pay. Flexibility for working parents is crucial and many parents have been forced to find creative solutions that allow them to structure their days around their children, especially when schools are closing and illness abounds. Finally, the digital age is well underway and retailers are shifting to internet-based operating models that don’t depend on the same physical labor they used to and workers are taking note and planning for their own long-term job security.
Trend 4: Inflation
To complicate matters for suppliers, inflation is rising, which means consumers are looking for deals. Right now, inflation is the worst it’s been for more than 40 years.
When inflation rises, wallets tighten and customers are on the lookout to save a few bucks. This means competition in-store for eyeballs and dollars is going to intensify.
Suppliers can embrace strategies like instant redeemable coupons (IRCs) to catch shoppers’ attention and incentivize them to make a purchase with 90% of consumers more likely to purchase a product if they see an opportunity to instantly save.
Trend 5 – Early Holiday Shopping
To capitalize on deals and maximize savings, 42% of shoppers will start their holiday shopping earlier than ever. We’ve already seen back-to-school shopping start early this year and Amazon Prime day and its competition from other retailers was one of the biggest ever.
What this means for suppliers is that they need to be ahead of the game and start their holiday discounts and sales ASAP.
Solution: What Retail Suppliers Can Do to Counter Pressures
With pressures stacking up from all sides, what’s a retail supplier to do? Pay extra attention to their in-store inventory. Here are the three priorities to focus on this season:
- Priority 1: Getting Inventory to the Floor on Time – because of the dual pressures of a strained inventory pipeline and a retail labor shortage, it’s crucial to pay close attention to making sure your holiday goods arrive at the retailer on time and that your retailer has the labor allocated to get it to the floor. And if they don’t, consider partnering with a merchandising partner that can fill that gap.
- Priority 2: Securing High-Traffic and Highly Visible Locations – endcaps and promotional displays aren’t just valuable locations because of higher sales rates. They’re also what retailers pay the most attention to. Maximize sales by grabbing one of these displays but be sure to keep an eye on product you have in these to make sure you’re getting the most bang for your buck.
- Priority 3: Don’t Forget Promotions! Run both in-store and digital promotions. This two-pronged approach will guarantee you get as many eyeballs on your deals as possible and drive in-store purchases.
Merchandising partners, like RMS, can help ensure your products make it to store shelves and those costly endcaps and displays are set and stand out. Merchandising companies can also help get late-arriving product out to the floor after missing a reset. Proactive brands who take it upon themselves to step in to help solve the current labor constraints will benefit with fuller shelves, good-looking displays, and most importantly a win with customers.
Interested in maximizing your sales this holiday season? Give us a call today to see how we can help.