Retailers’ top holiday supply chain concern is…
One specific area of the supply chain is making retailers nervous as the holidays approach.
Although 87.2% of surveyed retailers have measures in place to ensure trending products are available during peak shopping periods, 38.8% still cite having enough inventory as their biggest concern, according to The 2024 Supply Chain Confidence Survey presented by Manhattan Associates. (The survey was fielded before the current ports strike.)
More than eight-in-10 (82.4%) retail respondents have plans to manage last-minute order surges during the holiday season, with a leading 70.9% planning to increase in-store inventory.
Eight-in-10 retail respondents say they will leverage artificial intelligence tools to improve inventory management, demand forecasting and customer service this holiday season, while six-in-10 (60.8%) say generative AI will play a role in their holiday supply chain strategy.
More than six-in-10 (61.2%) retail respondents reported recent investments in new technologies to improve the efficiency of their supply chain.
Retail respondents had a much lower level of concern about inventory visibility, with 11.2% saying they don’t have enough visibility into their stock levels heading into the holiday season.
Other interesting retailer responses include:
- Seven-in-10 anticipate that holiday costs in 2024 will be higher than in previous years, driven by inflation and rising shipping costs.
- More than four-in-10 (43.6%) plan to make fewer seasonal hires in 2024 than 2023, with 68.4% considering hiring a non-priority for the holidays altogether.
- To make up for fewer seasonal hires, 34.8% of retail respondents are utilizing automation.
Consumer responses
The survey also revealed significant levels of consumer concern over inflation. More than nine-in-10 (93%) consumer respondents say price increases over the past few years have had a moderate or strong negative impact on them.
More than two-thirds (67.8%) of consumer respondents think that the rate of inflation is getting worse, with impact on their holiday shopping plans. Three-in-four (74.6%) expect to pay more for holiday gifts this year than last year, while 60% plan to buy fewer gifts, 57% will seek less expensive options, and 52.2% will look and are willing to wait for sales and deals.
In addition, four-in-10 (39.6%) say they will begin shopping for the holidays earlier than usual to spread out expenses. Of these respondents, 26.2% will start holiday shopping as early as October, and three-in-10 (31%) plan to start in November.
[READ MORE: Consumers to start holiday shopping before November, spend same amount as last year]
Other interesting findings about consumer holiday shopping plans include:
- Four-in-10 (40.2%) plan to do most of their holiday shopping online and some in-store.
- Close to two-in-three (64.1%) will reduce the amount they spend while shopping for non-essential goods.
- The same percentage (61.3%) of consumer respondents said they have not been able to save money as they had planned and that they now buy less expensive or off-brand products instead of their typical choices.
- More than three-in-10 (32.6%) consumer respondents are using AI in their holiday shopping, with 14.2% planning to use AI to find deals.
The survey was fielded for Manhattan Associates by a third-party provider and conducted from Aug. 23 – Sept. 6, 2024. Responses were collected from 500 management or senior-level officers in retail and supply chain logistics organizations in the U.S. In addition, 500 U.S. consumers 18 and up were surveyed about their sentiments and plans going into the 2024 holiday shopping period.
