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Retailers Prepare for Uncertain Holidays

Retailers are preparing for the upcoming holiday shopping season with one eye on the burgeoning demands of ecommerce and another on the uncertain economic outlook.

Statistics from holiday sales for the last few years vividly depict shopping seasons where the number of consumers turning away from bricks-and-mortar stores to shop on the Internet grows almost exponentially each year.

Mixed economic signals also seem to have consumers spooked. Although overall spending has continued at a steady pace, people have turned away from luxury goods (like fashion accessories, homeware, jewelry and watches) to spend more on experiences (like restaurants and travel) and home improvements.

To respond to these market challenges, retailers are scrambling to come up with the right mixture of consumer-facing ecommerce channels and ominichannel distribution strategies.

In the face of sluggish sales earlier this year they also are trying to exert more discipline to control already bulging inventories – something that has created an opening for savvy third-party logistics providers who can offer effective solutions.

Because those consumer goods inventories have grown since last Christmas retailers are not importing as much this summer in anticipation of the upcoming holidays, the National Retail Federation reports (AA, 6-15-16, P. 3).

One thing to keep in mind when reading NRF-generated material is that while they strive to be accurate, they also are cheerleaders for their industry and sometimes err on the optimistic side.

The Plan for 2016

Holiday retail sales in 2015 increased 3% to a total of $626.1 billion, and non-store holiday sales (primarily ecommerce) grew 9% to $105 billion, NRF reports.

But in order to achieve those sales numbers B&M retailers in recent years have leaned heavily on offering consumers deeper discounts and holding earlier sales.

Store executives say their priorities for this year include improving the in-store experience and delivery options, ensuring merchandise availability, and building up inventory appropriately.

NRF says the biggest factor in driving sales this year can be summed up in a single word: fulfillment. “Free shipping has moved from bonus to expectation, as has the ability to buy online and ship or return in-store.”

UPS recently reported that more than half (56%) of consumers want to know the precise date their package will arrive, rather than a range of time. UPS also says about 85% of online shoppers are willing wait five days for delivery, and two more days beyond that if free shipping is offered.

In addition, consumers increasingly want to know if an item is in stock before they visit a store, but retailers aren’t yet keeping up with the demand for that level of transparency, NRF warns.

Meeting the Ecommerce Demand

“If you invite customers to your digital commerce party, be sure you can handle the crowd,” stresses Jennifer Polk, digital marketing analyst with Gartner Inc.

NRF says omnichannel operations quickly evolved to the point where they are driving consumer expectations. As a result, customers are beginning to view stores as mini-fulfillment centers, supported by inventory visibility.

“Shoppers are increasingly taking advantage of ship-to-store (now also called BOPIS, or buy online, pickup in store),” NRF says, noting that a similar trend is reshaping reverse logistics.

Buy online, return in store (BORIS) options grew from 57% to 68% from summer to the holidays in 2015. “Whether picking up or returning, having the consumer in the store provides opportunities for add-on purchases,” NRF points out.

The more seamless retail becomes, the greater the need by retailers for tighter inventory management.

“A single view throughout the supply chain is more important than ever,” NRF says. Retail supply chain executives say this encompasses click-to-delivery visibility for entire lifecycle of order

Greater inventory control also feeds another retailer desire: being able to offer a bigger variety of shipping and delivery options, including faster and better product delivery for online purchases.

Online purchasing is here to stay and will continue to grow, according to the findings of a recent survey by the ecommerce platform BigCommerce

The poll shows that 96% of Americans are shopping online, spending an average of five hours a week and an average of 36% of their shopping budgets. (The survey also found that 43% of online shoppers have made a purchase while in bed!)

About 80% report shipping costs and speed influence their buying decisions, and 66% have decided not to buy an item because of shipping costs, including 72% of females and 59% of males.

OSHA Underscores Safety Incentive Ban

OSHA has issued a guidance to its regional administrators and whistleblower program managers urging them to crack down on employer safety incentive and disciplinary programs.

“If employees do not feel free to report injuries or illnesses, the employer’s entire workforce is put at risk,” Labor Department Deputy Assistant Secretary Richard E. Fairfax declares.

Fairfax points out that under current rules some workplace policies and practices could violate the law by discouraging employee injury reporting. OSHA recently strengthened its ban on these activities (AA, 6-15-16, P. 1).

OSHA also observes that the potential for unlawful discrimination under all of these policies may increase when management or supervisory bonuses are linked to lower reported injury rates, he says.

The guidance Fairfax issued also cites the following examples of prohibited activities:

  • Employer policies imposing disciplinary action on employees who report being injured on the job, regardless of circumstances. “Reporting an injury is always a protected activity,” Fairfax stresses.
  • An employee who reports an injury or illness is disciplined because of an employer rule concerning the time or manner for reporting workplace injuries and illnesses.
  • The employer disciplines an employee who reports an injury, claiming it was because the employee violated a safety rule.
  • While OSHA encourages employers to enforce legitimate safety rules, enforcing a rule more stringently against injured employees than those who are not injured suggests the rule is a pretext for discrimination against an injured employee.
  • Also banned are employer programs that provide employees incentives for not reporting injuries, such as entering uninjured employees from the previous year in a drawing to win a prize, or giving a bonus to a team if no team member is injured over a particular period of time.

Job Satisfaction Said Highest in 10 Years

American workers are the most satisfied with their jobs than they have been since 2005, the Society of Human Resources Management reports.

The survey conducted in late 2005 found that 88% of employees said they were satisfied overall with their job (37% reported being very satisfied, and 51% somewhat satisfied).

“What a difference a few years – and an improved economy – make in how workers view their jobs,” says Evren Esen, director of survey programs, noting the percentage of satisfied employees has been trending up since 2013.

“As the economy stabilized after the recession, employers began to focus again on factors that impact retention and employees found flexibility to seek out more compatible positions if they were ready to move on to new challenges,” she adds. “The result: workers are happy with their jobs.”

For the second year, the most important contributor to employee job satisfaction was “respectful treatment of all employees at all levels” (cited by 67% of respondents).

“Employees consider culture and connection to be of utmost importance. Feeling appreciated for their time and efforts creates a bond between employees, management and their organization,” Esen says.

Other top contributors were: compensation/pay, overall benefits, job security, opportunities to use skills and abilities, and trust between employees and senior management. Compensation increased in importance, with 63% of respondents citing it, the highest level since 2006.

Priorities and satisfaction were similar across generations, with 86% of Millennials indicating satisfaction, and similar to the percentages reported by Generation X (88%) and Baby Boomers (90%).

SHRM researcher Christina Lee says, “Stop the stereotypes. Although Millennials may have slightly different mindsets, on the whole, they tend to place significance on several of the same aspects of job satisfaction that Generation Xers and Baby Boomers do.”

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