Closed for Thanksgiving – But Does it Really Matter?

July 23, 2020


Retailers opening on Thanksgiving Day may be a thing of the past as Walmart becomes the largest retailer to announce that it will not open on the holiday. The official reason from Walmart is:

“We know this has been a trying year, and our associates have stepped up. We hope they will enjoy a special Thanksgiving Day at home with their loved ones. We are certainly thankful to our people for all of their efforts.”

-  John Furner, President and CEO of Walmart U.S.

Indeed, it has been a trying year for Walmart as well as for the rest of the retail industry. However, the one growth spot in retail this year has been e-commerce and while Walmart’s physical stores may be closed on Thanksgiving Day, the likelihood that it and a number of other retailers will be offering Thanksgiving Day online sales is pretty high.

In 2019, Adobe Analytics reported that Thanksgiving Day online sales totaled $4.2 billion, up 14.5% from Thanksgiving Day 2018. In addition, 45% of the 2019 Thanksgiving Day online sales happened on mobile, a 24.4% increase.

A recent consumer insights survey by Radial, a provider of omnichannel commerce technology and operations, found that shoppers do not plan to significantly change their holiday spend compared to 2019. In addition, 66% of shoppers indicated they will increase their online purchases during the 2020 holiday season.

Amazon's Prime Day Still Undecided

However, this year’s Amazon’s Prime Day remains up in the air. Prime Day usually takes place in mid-July. But, like a number of events, Amazon delayed this two-day event and instead is moving it to later in the year. While the date has not been announced, the company told third-party sellers to save the date for the week of October 5 for the event. If that is the case, the holiday season could be extended from the traditional start on Thanksgiving weekend to around the beginning of October.

If Amazon’s Prime Day occurs in October, it could mean the final nail in many retailers’ coffins. Many retailers have struggled to keep up as online retail continues to take a firm hold on total retail sales. Those retailers with significant real estate are perhaps those closest to stumbling the hardest and as such, the holiday season could be viewed as a Hail Mary for many.

For small parcel carriers, planning for this year’s holiday season, aka peak season, is probably more difficult than usual. FedEx and UPS have struggled to meet consumer demand throughout COVID-19 and at times have been overwhelmed with unexpected increases in volumes and delivery delays. Will they be ready for the holiday season is a big question.

What is certain are surcharges. Temporary, COVID-19 surcharges remain in place for both carriers and as peak season draws closer, peak season surcharges will be implemented as well. If Amazon does not topple the retailers this holiday season, the peak season surcharges combined with the temporary COVID-19 shipping surcharges (if they are still in place) may likely do it.

The 2020 holiday season will be an all or nothing period for many retailers. Because of the anticipated increase in online ordering, managing shipping costs will be even more critical than ever before.

 


ABOUT SPEND MANAGEMENT EXPERTS

Spend Management Experts provides strategic guidance to optimize your supply chain. Using cost modeling technology and market intelligence, we help companies with their transportation, distribution and fulfillment spend. Often large shippers can reduce their spend across the supply chain by 20% or more. We specialize in reducing distribution costs, increasing efficiencies, dynamic reporting, greater budgeting and forecasting accuracy and optimizing supply chain execution. We leverage our proprietary models to identify savings and build negotiation strategies based on data and business cases. As industry experts, our fresh approach provides clients with straightforward details on exactly how savings are derived. Spend Management Experts is your competitive edge, delivered.

Connect with Spend Management Experts on TwitterLinkedIn, and the Spend Management Experts blog.

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Closed for Thanksgiving – But Does it Really Matter?

July 23, 2020


Retailers opening on Thanksgiving Day may be a thing of the past as Walmart becomes the largest retailer to announce that it will not open on the holiday. The official reason from Walmart is:

“We know this has been a trying year, and our associates have stepped up. We hope they will enjoy a special Thanksgiving Day at home with their loved ones. We are certainly thankful to our people for all of their efforts.”

-  John Furner, President and CEO of Walmart U.S.

Indeed, it has been a trying year for Walmart as well as for the rest of the retail industry. However, the one growth spot in retail this year has been e-commerce and while Walmart’s physical stores may be closed on Thanksgiving Day, the likelihood that it and a number of other retailers will be offering Thanksgiving Day online sales is pretty high. In 2019, Adobe Analytics reported that Thanksgiving Day online sales totaled $4.2 billion, up 14.5% from Thanksgiving Day 2018. In addition, 45% of the 2019 Thanksgiving Day online sales happened on mobile, a 24.4% increase. A recent consumer insights survey by Radial, a provider of omnichannel commerce technology and operations, found that shoppers do not plan to significantly change their holiday spend compared to 2019. In addition, 66% of shoppers indicated they will increase their online purchases during the 2020 holiday season.

Amazon's Prime Day Still Undecided

However, this year’s Amazon’s Prime Day remains up in the air. Prime Day usually takes place in mid-July. But, like a number of events, Amazon delayed this two-day event and instead is moving it to later in the year. While the date has not been announced, the company told third-party sellers to save the date for the week of October 5 for the event. If that is the case, the holiday season could be extended from the traditional start on Thanksgiving weekend to around the beginning of October. If Amazon’s Prime Day occurs in October, it could mean the final nail in many retailers’ coffins. Many retailers have struggled to keep up as online retail continues to take a firm hold on total retail sales. Those retailers with significant real estate are perhaps those closest to stumbling the hardest and as such, the holiday season could be viewed as a Hail Mary for many. For small parcel carriers, planning for this year’s holiday season, aka peak season, is probably more difficult than usual. FedEx and UPS have struggled to meet consumer demand throughout COVID-19 and at times have been overwhelmed with unexpected increases in volumes and delivery delays. Will they be ready for the holiday season is a big question. What is certain are surcharges. Temporary, COVID-19 surcharges remain in place for both carriers and as peak season draws closer, peak season surcharges will be implemented as well. If Amazon does not topple the retailers this holiday season, the peak season surcharges combined with the temporary COVID-19 shipping surcharges (if they are still in place) may likely do it. The 2020 holiday season will be an all or nothing period for many retailers. Because of the anticipated increase in online ordering, managing shipping costs will be even more critical than ever before.  

ABOUT SPEND MANAGEMENT EXPERTS

Spend Management Experts provides strategic guidance to optimize your supply chain. Using cost modeling technology and market intelligence, we help companies with their transportation, distribution and fulfillment spend. Often large shippers can reduce their spend across the supply chain by 20% or more. We specialize in reducing distribution costs, increasing efficiencies, dynamic reporting, greater budgeting and forecasting accuracy and optimizing supply chain execution. We leverage our proprietary models to identify savings and build negotiation strategies based on data and business cases. As industry experts, our fresh approach provides clients with straightforward details on exactly how savings are derived. Spend Management Experts is your competitive edge, delivered. Connect with Spend Management Experts on TwitterLinkedIn, and the Spend Management Experts blog.

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