How the Pandemic Made Summer Unpredictable for E-Commerce
Like clockwork, big box stores like Lowe’s, Home Depot, or even specialty outdoor furniture and pool companies, could always count on the summer sun to be a siren call for customers looking to fill their homes and yards with barbecues, plants, lawn furniture, and pools. But for most other industries, summer was pretty much a snooze for sales. For many reasons, the summer of 2020 looked very different, and for supply chain professionals, it was completely unpredictable. With people stuck at home, and not on vacation, demand shifted –– like in an unprecedented demand for inflatable pools kind of way. This year, operations cannot afford to underestimate these new varying peaks and trends because new peaks mean meeting new inventory demands and labor needs.
With the vaccine here and available to most everyone, things feel like they’re returning to some semblance of normal. But, whether or not we’ll see a repeat, or a different summer peak, for e-commerce spending this year remains to be seen. There are still so many questions like will the economy open up fully? Will people socialize more or less? Will people want to continue spending more time at home, in their own yards?
For those of you in warehousing and supply chain, as you prepare for this new peak season, here are some things to consider.
Peaks of Seasons Past
In the before times, summer used to be the slowest season of the year for most retailers, but in less than three years, the e-commerce definition of “peak season” has shifted. Yes the pandemic has influenced purchasing behavior in the last year, but a steady increase in online shopping versus in-store was already in full swing. This 24/7, always on shopping mentality shifted traditional seasonal consumer trends.
For most industries, “peak season” was synonymous with October through December, the traditional holiday season. But Covid-19 upended that, and made everything more unpredictable. Typically a slower time for most retailers, Amazon’s Prime Day was inspired by the seasonal down time of the summer, where sales fell in mid-July. Originally intended as a one-time celebration of Amazon’s anniversary, it’s emerged as a global shopping extravaganza for the marketplace’s more than 100 million Prime members. The number of members who take advantage of Prime Day has doubled since Prime Day’s debut, and will undoubtedly continue to grow.
But, even the biggest ecommerce event of the year was affected by Covid. Typically in July, Amazon pushed Prime Day all the way to October in 2020, an indicator that supply chains were not in a position to take on even more load. Though this year, experts are predicting it will be back on track for July 2021.
Peak Seasons Change
Even prior to Covid-19, ecommerce peak seasons were occurring with less predictability because of the rise in online shopping. But last year really shook things up. In light of social distancing measures, people went into major home improvement mode, snapping up backyard pools, saunas, and other products that made staying at home more of an oasis since the only way to safely socialize was in the private outdoors. This overcompensation for lack of vacations and travel led to some crazy shortages in home improvement and outdoor furniture inventory. That was a trend that no one could have predicted in January 2020.
Looking ahead to the upcoming summer months, blindsided retailers don’t want to be caught with the same unexpected peaks and valleys in sales. Will people still stay home with just their family unit or start gathering?
Operations and warehouse fulfillment need to analyze their product lines to do their best to predict or be prepared for peaks. This means making the right decisions around what inventory to stock, at what volumes, and staff up accordingly. Shortages and delays in shipping were not met well by pandemic weary shoppers last year, and they definitely won’t be any more tolerant a year later. Be prepared to deliver the goods in a timely manner or risk having customers find greener, more well stocked pastures.
Obviously, it’s called a prediction because none of us has a crystal ball on the warehouse floor. But, you can be better prepared for flexibility so that you can meet the demand during any given season, expected or not. As the landscape becomes even more volatile, flexibility in planning, anticipating inventory and staffing needs, are critical to get goods from the container to the warehouse to the customer.
That’s why we created WorkHero’s seasonal flex option, which provides warehouses with a unique form of hedging protection from unpredictable shifts in labor needs caused by weather, customer preferences, and yes, even a once in a century pandemic.