From Easter, Christmas, Eid, to New Year, holidays often become the busiest days for logistic companies because customer’s demands are usually seeing significant growth during these times. Aside from professionals in the logistics industry, few people will probably put any thought into how their beloved consumer products find their way onto shelves. The products are going through long processes before getting on the shelves and into the hands of consumers.
Let’s explore how logistics play an important role on holiday season.
According to Deloitte holiday retail survey, most consumers are bullish on the economy, household financial situation, as well as spending plans. The surveys also suggests that there is an increasing online spending and is expected to account for 57 percent of all purchases. It was reported that average amount consumers panned to spend for gifts is US$ 1,266 to US$ 1,536 per consumers. For some retailers, the holiday season can represent anywhere between 25-40 percent of annual sales.
Although technically a holiday season begins on November 1, businesses and logistics providers must start preparing for it in advance to meet the demands. Derby shows that there are 53.8 percent of people admit to start their holiday shopping before November and 13 percent before September. Holidays included in 61 days are thanksgiving, Christmas, Hanukkah, and Kwanza. The estimates buyers usually increase 12 percent before September, 7 percent on September, 22 percent on October, 39 percent on November, 16 percent on December, 1st – 14th, and 4 percent on December 14th – 31st.
Not to mention, mobile and online shopping also increase up to 55.4 percent over 2012. E-commerce has become such a significant portion of total sales for many retailers that the entire supply chain strategy is being reassessed effectively catapulting e-commerce to the top of the list of priorities for the retail industry. There are 24.9 percent of all online traffic on Black Friday coming from smartphones.
In the year of 2014, the number one consumers on online shopping was people with age range from 18-24, and the least (6.9 percent) consumers were 65+ year old adult people. Why do many people from teen to adult choose to shop online rather than in store?
The answer is simple, it is because it is more convenient. 35 percent of respondents said that 24-hour online shopping is convenience. It is also easier to compare the prices (33.1 percent) and is easier to find items online than in stores (17.5 percent), as well as there are better variety in online shop (17.4 percent). Furthermore, the store sometimes gives free shipping which makes consumers interested in buying more.
What does it mean for Logistics Company?
As more and more customers are seeking to avoid the frustrations of shopping in physical stores, delivery drivers log some serious mileage to deliver holiday gifts. Logistics providers have the task of finding the most efficient methods of delivering and transporting holiday packages. The SupplyChainBrain shows that automation could be the number one helper delivery in holiday season. Giant company like Gap Inc. and Walmart Inc. already use automation and artificial intelligence to sort retailer’s orders, check inventory, and tell workers where to find goods easily. IDC also reveals that about 16.5 percent of company across industries are now using service robots for commercials, and 21.5 percent of them in pilots.
Read also: 6 Top-Notch Technologies to Boost Supply Chain