Retailers prepare for 2024 holidays with early shopping trend

Retailers and supply chain leaders are gearing up for the 2024 holiday season amidst challenges such as inflation, inventory management, and evolving consumer behaviours.

According to the '2024 Supply Chain Confidence Survey' conducted by Manhattan Associates, inflation is significantly affecting spending behaviour. The survey reveals that 93% of consumers say rising prices have influenced their holiday shopping, prompting many to spread their spending and begin shopping earlier than in previous years. Nearly 40% plan to start shopping earlier to benefit from sales, with 26% beginning as early as October.

"This year, we're seeing a growing trend toward early shopping as people try to manage their finances in light of inflation," said Raghav Sibal, Managing Director for Australia and New Zealand at Manhattan Associates.

"Retailers are adjusting their inventory and promotional strategies accordingly to accommodate consumers' needs to stretch their budgets across a longer period."

Inventory management remains a critical issue for retailers and supply chain leaders. While 87% of retailers have taken steps to ensure they stock trending products for peak demand, about 40% are concerned about inadequate inventory levels to meet consumer expectations.

Raghav Sibal remarked, "Economic uncertainty is definitely adding layers of complexity, with nearly 70% of supply chain leaders viewing inflation and shifting economic trends as a greater concern than geopolitical or infrastructure issues. Even with rigorous planning, maintaining adequate inventory remains one of the most challenging tasks this season."

In response to the challenges presented by a softening labour market, retailers are reducing reliance on seasonal hires, with 44% planning fewer temporary staff and 68% considering it a low priority.

Conversely, 58% of supply chain leaders are planning to hire additional staff to meet the peak period's expected demand.

"Technology is truly the backbone of this year's holiday strategy for many retailers," Sibal commented. "With automation helping to manage workforce constraints and ensure seamless operations during peak periods, we're witnessing substantial investments across supply chain functions."

"About 60% of leaders are embracing innovative tools to enhance efficiency and adaptability in both inventory management and customer service. In particular, AI will be essential this season, enabling retailers to quickly respond to demand shifts and optimise operations during the busiest times."