How should retailers prepare for holiday shortfalls?

Discussion
Photo: RetailWire
Dec 14, 2021

A survey taken in November finds 77 percent of U.S. consumers worried that they will face issues buying gifts online this year. The top concerns include gifts not arriving on time (cited by 45 percent), being more expensive (42 percent) and being unavailable (33 percent).

The concerns expressed in the survey of 1,000 U.S. consumers from messenger software provider Intercom come with heightened expectations, including 94 percent wanting retailers to let them know of delays without having to ask about them. Seventy-nine want alerts about delays and backorders before they check out or make a purchase.

An accompanying survey of 500 customer service reps, however, finds 38 percent believing their company is not doing enough to set expectations on item availability and delivery times.

The survey results arrive amid widespread media reports of supply chain disruptions while consumers encounter bare shelves and rising prices.

Ultimately, it will be front-facing employees in stores and at customer service centers feeling the brunt of holiday shortfalls.

The Intercom survey found customer service inquiries increasing due to heightened concerns over delivery delays and product availability. Among the customer service rep respondents, 60 percent believe it is harder than ever to fully resolve customer issues and 52 percent are considering leaving their jobs due to the stress.

Among other related surveys:

  • Convey by project44’s fifth annual holiday survey found consumers’ top concerns this year are out of stock items (50 percent), shipping delays (46 percent), higher prices (46 percent) and higher shipping costs (41 percent). Sixty-two percent wanted the ability to track packages en route, 98 percent wanted retailers to notify them if their delivery will be late and 67 percent vowed not to shop with a brand again after a poor delivery experience.
  • The “14th Annual Global Shopper Study” by Zebra Technologies found that only 38 percent of shoppers completely trust retailers to fulfill online orders as promised and that 51 percent of retailer associates completely trust their company to fulfill online orders.
  • An Oracle survey taken in September found supply chain disruptions leaving consumers frustrated (61 percent), impatient (46 percent), anxious (45 percent) and angry (34 percent).

DISCUSSION QUESTIONS: What should retailers be doing now in anticipation of potential out-of-stocks, late deliveries and other holiday shortfalls emanating from supply chain disruptions? What strategies or messages would you have for customer service teams and in-store workers facing shopper angst and anger?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"Customer service folks are going to carry the brunt of the shopper disappointment, they always do. For these brave souls I say, just do the best you can."
"I expect we will find fewer shortfalls than expected. Mass media has loved the supply chain story and overplayed it."
"One word: Transparency. Give customers the truth. Let them know about inventory levels, shipping deadlines, etc. Give them options if you’re out of stock."

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24 Comments on "How should retailers prepare for holiday shortfalls?"


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Neil Saunders
BrainTrust

From my store visits over the past few weeks, some retailers have a glut of inventory rather than a shortage. Nordstrom, Macy’s and others are rammed full of stock like I have never seen before. Of course, whether it is the “right” stock is open to question – but they are not really facing shortages. Other retailers do have shortages, with gaps on shelves and fixtures. So the picture is very mixed and consumers will likely need to shop around more to get what they want. For online, the biggest challenge is getting everything delivered on-time and very clear communication and updates from retailers are helpful here.

Cathy Hotka
BrainTrust

Agreed, Neil, and consumers have been savvy this year, ordering in advance and being flexible about their choices. It’s not the disaster some predicted.

Mark Ryski
BrainTrust

Given the heighted level of publicity surrounding the supply chain issues, stock outs should not be a surprise to anyone. Shoppers should do what experts have been saying for months – shop early, buy what you can when it’s available. I agree that customer service folks are going to carry the brunt of the shopper disappointment, they always do. For these brave souls I say, just do the best you can. Be polite and empathetic with customers, but don’t be too hard on yourself or internalize any negative customer comments.

Liza Amlani
BrainTrust

Communication is everything and retailers need to keep customers in the know.

If product is delayed, out of stock, or if the retailer is dealing with supply chain disruption that will cause the customer to become irate, keeping them informed is the only way to keep the customer.

Offering substitutions or future promos could also help but engaging with the customer is key. Giving them a call could go very far and it shows that retailers truly care. The customer-retailer relationship should never end at payment.

Shep Hyken
BrainTrust

One word: Transparency. Give customers the truth. Let them know about inventory levels, shipping deadlines, etc. Give them options if you’re out of stock. Provide a gift card with a picture to share with the recipient if their gift won’t make it on time. Keep in touch and give updates on a regular cadence. Customers love knowing. It gives them a sense of control over the situation.

As for shoppers’ angst and anger, managers need to be well-trained on how to deal with the upset customer. If time permits, teach their teams how to deal with it as well. Remember, you’re not trying to win an argument. You’re trying to win the customer.

Dave Bruno
BrainTrust

To borrow loosely from Robert De Niro in the classic but woefully underrated movie Born to Run, “I have two words for you: communicate, communicate, communicate.” There really is no such thing as overcommunication in customer service. Advising and alerting proactively will minimize stress on shoppers and service/store personnel as much as possible.

Dave Bruno
BrainTrust

Just realized I must have had Springsteen on the brain this morning. The movie I meant to reference was Midnight Run!

Christine Russo
BrainTrust

There IS a sliver lining here and that is that the consumer has made it loud and clear they want to receive accurate communication. That means they are inviting the retailer to communicate – which is a gateway to future personalized communications. Retailers should, by now, have SMS text opt-in options for communication about orders or delays and then carefully segue the communications to offers and engagement post-holiday.

Rich Kizer
BrainTrust

In my department store days, we at times faced this dilemma. We dealt with most disappointed customers by offering a gift card at a low percentage of the retail price along with an apology and a card to submit to us for redeeming the gift item. The buyer got a token gift card as well. Everyone was happy, and good relationships were established.

Ken Morris
BrainTrust

This is a new game with new rules that retailers really have to get right. We understand that this is the annual battle for every dollar retailers can get customers to commit to versus shopping with their competitors. But shoppers are getting more and more savvy every day about the likelihood of getting something that they order. Truly, the best approach is to be extremely proactive and get as much brand engagement and commitment as possible up front.

Of course, for those retailers who do have the technical ability to know exactly what their inventory is and where it is at any given moment, they should say that and use it as a part of their messaging strategy. Shoppers have learned that they can’t trust retailers in general to tell them the truth about what is and is not actually in stock. All the more reason for a retailer who does have this ability to communicate it loud and clear to its customers.

Gary Sankary
BrainTrust

There are 11 days to Christmas. At this point in the season I would expect out-of-stocks on most desired items. And for some SKUs that’s the case.

Customers have been told non-stop since September that supply chain disruptions were going to result in massive outages. In reality, at least in the upper-Midwest where I shop, this season has been been pretty run-of-the-mill. Outages are spotty, certainly not extraordinary. To the contrary I see lot inventory in stores, especially in apparel and home. I would say that customer service teams need to do what they always do this time of year. Be transparent about inventory, let customers know if and when they can expect to find the item they’re looking for and, if needed, do what they can to help the customer find the item. Simple retail blocking and tackling, especially at this time of the year.

Melissa Minkow
BrainTrust

Retailers can communicate clearly that certain products won’t be available until a specific date but still allow consumers to purchase said items. It’s the equivalent of a gift card, but with an end product already picked.

Real-time inventory data plays a crucial role in keeping customers happy. If they can see before they purchase how many of the product are still available in-store and when they’ll be back in stock online, expectations will be established. As long as retailers don’t over-promise or under-communicate, consumers will understand.

Richard Hernandez
BrainTrust

QVC and the like are touting their inventory and the fact that it ships (for free) NOW!
I think what is happening is that a lot of retailers are finally receiving their product off of those container ships but I suspect not enough to keep up with the demand. Communication (or over-communication) is the key here.

Jeff Sward
BrainTrust
Brick-and-mortar shopping is pretty straightforward. It’s either in stock or it’s not. And the customer can decide to go with another choice or shop elsewhere. Walmart, Target, Bed, Bath and Beyond, and others seem to be in decent shape. Online is a little trickier but brands and retailers seem to be doing a pretty good job of communicating inventory status. I subscribe to a lot of daily emails just to be able to constantly scroll and scan what’s going on. The “shop early” emails started in early November. The “we might experience stock outages” emails started about the same time. The “order by this date” to facilitate pre-Christmas delivery started last week. When I scroll to individual product pages on some websites, there are now styles tagged with “anticipated in-stock date is approximately Jan/Feb XX.” So the customer can decide to wait or make another choice. I haven’t seen that in prior years. So brands and retailers seem to be doing a pretty good job with being transparent about their inventory positions in order to… Read more »
Doug Garnett
BrainTrust

I expect we will find fewer shortfalls than expected. Mass media has loved the supply chain story and overplayed it. Things are serious but spotty in impact. Prepare? The question each retailer needs to ask themselves is when shortfalls are harmful. Quite often, they aren’t serious problems unless a chain mismanages customer responses.

Andrew Blatherwick
BrainTrust

People should be more concerned that Christmas may not happen again this year if the Omicron variant continues to spread as it is currently. While no government wants to impose further restrictive measures, especially over Christmas, the situation is getting very serious, or certainly is in Europe.

Retailers need to be transparent about supply chain issues. Consumers have been warned and will be prepared to understand provided they are kept informed. This puts the emphasis on retail staff and customer service staff of online retailers. They need to be kept fully informed of the situation and how to help customers if they need to find alternatives. Good customer service at this time could win you a new loyal customer and bad customer service could just as easily lose you a loyal customer.

Dick Seesel
BrainTrust

I am not seeing or experiencing the kinds of shortages that have been in the news recently — although we are not in the market for specific “hot” games or toys that always seem to have scarcity issues. Most retailers are savvy enough to work around outages where they exist.

One of my “Captain Obvious” mottos from my days as a merchant was, “Own what you sell, or sell what you own.” If the sweater you set on a feature table based on a planogram has sold out (or never delivered), move something else in its place!

Paula Rosenblum
BrainTrust

It’s a little late to be having this conversation. Alternate sources was the way to go.

Mel Kleiman
BrainTrust

This will not be the big deal that the news is making of it. What the news is doing is actually helping retailers by telling the story over and over again. The customer is learning that this is the new normal. All a salesperson or customer service person can do is apologize.

Ananda Chakravarty
BrainTrust

Retailers have been handling these issues for decades now. With the additional challenges of the supply chain issues and out-of-stock issues, the best protocol is to be honest and tell the truth up front. Extend delivery dates. Be kind to customers. Offer rebates. Add extra staff. Make life easier for the customer. Empower your employees and train them in handling irate customers. The best retailers have pre-stocked, put in disclaimers, and made sure customers know that some products will be scarce or not deliverable within a day. Customer service will be well manned and associates will be given instructions on engagement for stock-outs and returns. Hold on — isn’t this what retailers do every year around this time?

Ryan Mathews
BrainTrust

In a peculiar way, out-of-stocks may be less of a problem this year since everyone from the media to President Biden has addressed the issue for months, so consumer expectations should be tempered down somewhat. Customer service teams need to be ready to suggest alternative purchases not as “substitutions” for what customers really want, but as even better gift ideas. Easy to say, but hard to do. People are going to be nasty this holiday season no matter how much they intellectually understand the supply chain issues.

Camille P. Schuster, PhD.
BrainTrust

Retailers need to set expectations using realistic, or even better, conservative delivery times. No one objects to something arriving early if it is properly marked. Offering additional suggestions for gift ideas is helpful when there are out-of-stocks. Suggestions might be something that has not been considered. Except for kids toys, the retailer can talk about the holiday season rather than one day. Preparations should have begun months ago as soon as it was obvious that a problem may occur.

Brandon Rael
BrainTrust
It’s far too late at this point of the holiday shopping season to mitigate the inventory shortfalls customers are experiencing during their in-store and online shopping journeys. With the global supply chain narratives across the news and social media channels for months now, customers have been warned to shop earlier than usual. Retailers have also driven far more aggressive promotional strategies, extending as far back as the October timeframe, to help mitigate the shortages. The silver lining that will come out of these supply chain disruptions is the need and imperative around inventory and assortment optimization strategies. By taking a far more prescriptive demand planning approach, retailers could carry the right trend-ready products, at the right place, at the right time, and the right price. Additionally, sustainability initiatives call for a less-is-more strategy, so retailers do not have to overstock items that are not key items or are not trendy. There is no need to be everything to everyone in the physical store. Every touchpoint with the customer is an opportunity to drive a positive… Read more »
Anil Patel
BrainTrust

During the pandemic, BOPIS became a high-stakes omnichannel strategy. And given the ongoing supply chain crisis, it appears that pre-orders and back-orders are on the same track. Customers do not mind waiting for their orders if they are given an accurate estimated arrival time (ETA). Supply chain problems do not appear to be going away anytime soon. Investing in technology that allows for efficient inventory & order management will be the optimal strategy for the forthcoming busy seasons. Accurate information can help manage customers’ delivery expectations and reduce customer dissatisfaction in a variety of ways.

wpDiscuz
Braintrust
"Customer service folks are going to carry the brunt of the shopper disappointment, they always do. For these brave souls I say, just do the best you can."
"I expect we will find fewer shortfalls than expected. Mass media has loved the supply chain story and overplayed it."
"One word: Transparency. Give customers the truth. Let them know about inventory levels, shipping deadlines, etc. Give them options if you’re out of stock."

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