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Record-breaking 2020 holidays leave lasting mark on retail industry
by Paul Davenport Paul Davenport on

The 2020 holiday shopping season was a challenge on nearly every level, from testing the limits on fulfillment and ecommerce infrastructure to forcing brands to rethink what to do with their brick-and-mortar footprint. Despite it all, retailers enjoyed a 8.3 percent jump in sales from 2019 over November-December, besting the National Retail Federation’s (NRF’s) more modest forecast.

Total sales climbed to $789.4 billion over the period, which includes $209 billion that came from online or non-store sales, which were up 23.9 percent from the 2019 holiday season.

The 8.3 percent jump in sales over November-December was more than double the 3.5 percent average holiday increase that the NFR had measured over the previous five years, including the 2019 holiday’s 4 percent gain.

The NRF had forecast that sales during the 2020 holiday season would grow between 3.6 percent and 5.2 percent year-over-year to a total between $755.3 billion and $766.7 billion; a figure that many worried retailers are glad to see has been surpassed.

“Despite unprecedented challenges, consumers and retailers demonstrated incredible resilience this holiday season,” said NRF President and CEO Matthew Shay. “Faced with rising transmission of the virus, state restrictions on retailers, and heightened political and economic uncertainty, consumers chose to spend on gifts that lifted the spirits of their families and friends and provided a sense of normalcy given the challenging year.”

The figures do not take into account automobile sales or restaurants, which are two industries that have faced more of a mixed bag over the course of 2020 as consumers stayed home, stifling much-needed foot traffic to their physical storefronts.

As a result, it seems consumers focused their spending on generous gift giving—specifically when shopping online—resulting in more than $100 billion in sales over the course of November alone, which is the first time a single month has ever hit those highs, according to Adobe Digital Insights.

Physical retail takes on a new look

Buy Online Pick-Up In Store (BOPIS) options, which became almost instantly popular at the start of the pandemic, accounted for 25 percent of all online purchases during the 2020 holiday season, jumping 40 percent from 2019’s pre-pandemic holiday trend. Similar to last year, the most popular day for BOPIS was December 23 (that is, two days before Christmas) according to Adobe, offering an alternative to shoppers who may have missed last-minute delivery deadlines.

Despite the 2020 holiday shopping season being in the rear-view mirror, holiday returns and late deliveries are extending the impact of these record sales well into the new year, prolonging the challenges for stakeholders in the fulfillment chain.

UPS anticipated that they would be handling almost 9 million returns over the first week of January, for instance, while many companies have been forced to rethink their return policies altogether to avoid a deluge of product at overcrowded warehouses.

A big reason these stakeholders are feeling is overwhelmed is that they’ve been forced over the past year to transform their priorities toward digital commerce in a larger way than perhaps ever before. As companies looked for safe ways to leverage their brick-and-mortar locations, for instance—including what to do with stock that had previously been allocated to now empty stores, for starters—it’s been a rollercoaster of trial-and-error in nailing down successful processes.

Still, with quarantine restrictions remaining and many people adjusting to a more digitally-oriented way of working and living, many of these rapid changes are bound to stick around long after the pandemic lifts. That includes supporting the digital infrastructure that connects all the arms of the retail sector that need to collaborate to ultimately serve customers on virtual channels.

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Filed Under: industry insights

Tags: physical retail, online retail, ecommerce, online shopping, holiday season, holiday shopping, network transformation, enterprise WAN, network performance monitoring, network performance, retail network, retail fulfillment, digital transformation, retail transformation, retail

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