money Christmas 2020: Here's how to navigate inventory and shipping uncertainties this holiday season
As the pandemic shrinks holiday gatherings, Americans will rely on mail carriers to deliver gifts to their loved ones on Christmas more than ever before.
Nearly 2 in 5 people plan to shop earlier this year than in previous ones to help avoid shopping and inventory uncertainties, according to a new survey from Klaviyo, an e-commerce marketing platform.
Calling the shift to e-commerce “substantial and significant,” Tom Forte, a senior research analyst at D.A. Davidson, recently told Yahoo Finance: “The irony for 2020 is that it's been Cyber Monday essentially every day since late March, early April.”
Retailers have had to adjust inventory levels to meet shoppers where they’re shopping. But unlike in the spring, when the coronavirus crisis caught the U.S. off guard, retailers are largely prepared to meet the demands of the holiday spending season.
“The big difference between [now] and March when we couldn't find toilet paper is that this is something that everybody saw coming,” Alejandro Toriello, associate professor at Georgia Institute of Technology, told Yahoo Money. Retailers have “probably been able to do some shifting of resources and some additional investment to prepare.”
Here’s what to know.
Why were there shipping delays?
The sudden influx of online shoppers in March inundated the supply chain, which couldn’t keep up with demand or scale quickly enough. In other cases, raw materials were harder to come by when economies were shut down across the globe.
Retailers have been working to “flatten the demand peak,” so it’s “predictable” rather than “spiky,” Toriello said. But planning for the biggest demand peak — the holiday season — is not unique to 2020.
A protracted holiday shopping season has long been the dream for retailers. That’s why stores play Christmas music in October, so shoppers can get into the spending mood, and retailers can avoid an inventory pinch that can come with the winter holidays.
However, this year is unlike any other, and the supply chain is still recovering — even for e-commerce giants.
For instance, Amazon moved Prime Day, its 48-hour spending extravaganza, from July to October this year with the goal to “ease the pressure on Amazon’s fulfillment centers by pulling some sales forward in the fourth quarter,” Forte said.
What's in stock? What's not?
At the onset of the pandemic, there was a national run on items like hand sanitizer, cleaning products, and face masks as panic-stricken Americans stockpiled supplies.
In some cases, companies retrofitted their manufacturing to supply basic public health necessities. For example, liquor distillers and garment manufacturers spooled out hand sanitizer and non-medical grade face masks efficiently.
But that kind of reconfiguration didn’t cross over to other items that became in demand later in the pandemic, such as fitness items. Nine months later, kettlebells, dumbbells, and free weights are still hard to come by due to overwhelmed suppliers that are working through a “long backlog.”
“I wish that personal fitness and staying healthy was something that during the pandemic would also be perceived as crucial,” Toriello said, “but it just doesn't have the same ring,”
Toriello attributes the scarcity to the raw materials the equipment uses, which is much costlier than, say alcohol, and more expensive to ship due to the weight. Other low-in-stock items this season are some consumer electronics, such as webcams and gaming devices, according to Forte.
To avoid inventory issues, Forte recommended turning to online marketplace Etsy that has a “structural advantage on Amazon” because goods come from private sellers rather than in-house or through large-scale vendors.
How to estimate your holiday shipping
The general rule of thumb is the earlier an item ships, the earlier it will arrive and the less it will cost. Another pandemic-era consideration is to ship earlier for the best chance of avoiding long lines and crowds at the post office or shipping stores.
“Collectively, the U.S. Postal Service, FedEx, UPS, and even Amazon’s own efforts, I think this is going to be a very challenging logistics e-commerce period,” Forte said.
Here are the key dates to know from the three main shippers:
FedEx: For domestic delivery by Dec. 25, send items by:
Dec. 9 via SmartPost
Dec. 15 via Home Delivery and Ground
Dec. 21 via Express Saver, 3Day Freight
Dec. 22 via 2Day, 2Day A.M., 2Day Freight
Dec. 23 via 1Day Freight, Extra Hours, Standard Overnight, Priority Overnight, First Overnight
Dec. 25 via SameDay, SameDay City Priority, SameDay City Direct
UPS: For domestic delivery by Dec. 24, send items by:
Dec. 15 via Ground
Dec. 21 via 3 Day Select
Dec. 22 via 2nd Day Air
Dec. 23 via Next Day Air for Dec. 24 delivery.
There is no UPS pickup or delivery service on Dec. 25.
U.S. Postal Service: For domestic delivery on or before Dec. 25, send items by:
Dec. 15 via Retail Ground service
Dec. 18 via First-Class Mail
Dec. 19 via Priority
Dec. 23 via Priority Mail Express
Shipping directly from an online retailer saves a trip to a mail center but doesn’t ensure a pre-holiday delivery date. Companies are tight-lipped regarding delivery estimates — especially during the holiday rush.
Americans have been spoiled by free shipping, but Toriello warns that you pay for what you get and to compare shipping options when shopping. The good news is that software exists to eliminate the arrival guesswork, Toriello said.
“Nowadays these systems are fairly sophisticated and can give you an accurate prediction of how long it's going to take for things to get where you want them to get,” he said. “Basically 19 times out of 20, or something like that, those predictions are going to be correct.”
Stephanie is a reporter for Yahoo Money and Cashay, a new personal finance website. Follow her on Twitter @SJAsymkos.
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