BUSINESS + ECONOMY

Going to the store may be your smartest bet to navigate the supply chain crisis this holiday

Nov 24, 2021, 7:56 AM
An employee walks in the aisles of Mary Arnold Toys, New York city oldest toy store on August 2, 20...
An employee walks in the aisles of Mary Arnold Toys, New York city oldest toy store on August 2, 2021. - It's always "better to shop a little early" for the holidays, but this year, Judy Ishayik, co-owner of a New York toy store says, "We are telling people to shop for Christmas in September." Global shipping snags are causing shortages, delivery delays and price increases -- all headaches for toy stores and manufacturers. (Photo by Kena Betancur / AFP) (Photo by KENA BETANCUR/AFP via Getty Images)
(Photo by KENA BETANCUR/AFP via Getty Images)

    (CNN) — The supply chain crisis means last-minute gift buyers may have little choice but to go shopping the old-fashioned way this holiday season.

High demand, combined with supply chain delays, materials’ shortages and troubles hiring workers, are shrinking the availability of items both online and at stores. As customers get closer to the last minute, physical stores will become a more appealing option for shoppers than waiting around for delivery, analysts expect.

Even if customers can’t find exactly what they’re looking for at a store, it’s usually easier to browse around for an alternative in person — and they can try it on.

“Brick and mortar may be more attractive for consumers later in the season,” Rod Sides, a vice chairman at Deloitte and leader of its US retail and distribution practice, said in an email. “Shoppers can leave with goods in hand, versus waiting on promised dates from shippers.”

Consumers saw more than 2 billion out-of-stock messages while browsing online in October, according to Adobe Analytics. That’s a big reason why, in physical stores, sales will rise by 8% this year — a 10-year high — as shoppers return to in-person shopping and try to avoid shipping delays, according to real estate research firm CBRE.

Analysts also believe buy online, pickup in store orders will boom this holiday because of shipping concerns.

Shoppers will lean on curbside pickup “more than ever to give them peace of mind about their holiday purchases” with wait times and items out of stock high on consumers’ minds, said Andrew Lipsman, a retail analyst at market research firm Insider Intelligence.

Retailers will heavily promote pickup as an option for customers on their websites and mobile apps, in marketing emails, and on television to appeal to customers anxious about buying online late in the season, Lipsman expects.

Stores say they have greater control over inventory in stores and through curbside pickup than they do on home delivery orders — meaning it’s less likely there will be a mistake or delay on an order.

“The closer I got [to the holiday], I would absolutely be using the ship to store because that’s going to give more confidence in being able to actually get the thing in time,” Ben Johns, the general merchandising manager for action sports at outdoor equipment retailer REI, said in a recent interview.

When customers order online and pick up their items in stores, products are either in the store already or REI sends them from one of its warehouses using its own trucks. That means REI doesn’t need to rely on third-party delivery carriers it has less control over to deliver to customers’ homes, he said.

$5 off orders and free blankets

Retailers have an incentive to draw shoppers into their stores.

It’s typically more profitable for retailers to have you shop in person than order to your home because they have to pay expensive last-mile delivery costs. Return rates are also higher for items purchased online, and retailers have to eat the costs for customers’ returns.

Top retailers are pushing customers this year to visit their physical stores to shop or order online and scoop up their items in person.

Kohl’s is offering customers $5 off orders when they pick them up in stores. It’s also trying to make the pickup process smoother for customers by adding temporary new pickup locations and more designating parking spots for pickups, as well as a self-pickup test where customers can access their orders using a link and code.

Kohl’s expects increased demand for pickup orders this year in part because it “eliminates the added stress of waiting for packages to arrive on your doorstep,” Paul Gaffney, Kohl’s chief technology and supply chain officer, said in an email.

Carter’s, the children’s clothing chain, is offering customers gifts as an extra perk if they purchase items on certain days in stores — but not online — such as blankets from November 19 to November 21 and a Skip Hop toy from December 10 to December 12.

Randa Apparel & Accessories, which sells brands such as Levi’s, Tommy Hilfiger, Calvin Klein and others, has shifted a large portion of its advertising spending to push customers to stores, instead of buying online. It’s also directing more of its inventory to stores than e-commerce.

“When inventory is limited, we prefer to drive consumers to in-store purchases over online purchases,” said David Katz, Randa’s chief marketing officer.

Customers purchasing products in stores is more profitable for Randa than online sales, which often come with “very large reverse logistics costs” on return orders. “We’ve paid the tuition for this education, and it was an expensive lesson to learn,” he said.

When shoppers come into stores, they also tend to make impulse purchases or buy related items nearby — belts, for example, near the pants they’re buying. This happens less frequently when buying online.

Overall, Katz said, “the frustration level is lower when you go to mortar and brick, particularly when inventory is limited.”

The-CNN-Wire
™ & © 2021 Cable News Network, Inc., a WarnerMedia Company. All rights reserved.

We want to hear from you.

Have a story idea or tip? Send it to the KSL NewsRadio team here.

Today’s Top Stories

Business + Economy

File**People walk past the entrance to a Bed Bath & Beyond retail store along Sixth Avenue in N...
Paul R. La Monica and Nathaniel Meyersohn, CNN

Bed Bath & Beyond says it can no longer pay its debts

The end could be near for struggling retailer Bed Bath & Beyond, as it warned in a regulatory filing Thursday that it received a notice of default from its lender, JPMorgan Chase.
2 days ago
With 24 other states on board, the Utah Attorney General announced on Friday a lawsuit against a De...
Simone Seikaly

Utah leading a lawsuit against new ESG rule affecting 401(k) plans

Utah Attorney General Sean Reyes said the states in the lawsuit are concerned about the federal government's promotion of ESG investing.
2 days ago
savings system right on the money...
Mark Jones

Economists are worried of a recession in 2023, financial expert weighs in

Many economists are fearing a recession in 2023 despite the U.S. economy ending last year better than expected.
3 days ago
A new service called Cottonwood Connect could address parking problems at the ski resorts in Big an...
Kate Davis and Simone Seikaly

Cottonwood Connect offers a new way to get up Cottonwood Canyons

The goal is to fill gaps left when UTA limited ski bus service. The shuttle will run Thursday through Sunday through mid-April.
3 days ago
The U.S. economy expanded at a 2.9% annual pace from October through December, ending 2022 with mom...
PAUL WISEMAN AP Economics Writer

US economy slowed but still grew at 2.9% rate last quarter

Most economists think the economy will slow further in the current quarter and slide into at least a mild recession by midyear.
3 days ago
About 87% of Tuesday's US flight cancellations are Southwest, according to flight tracking website ...
Pete Muntean and Greg Wallace, CNN

US Transportation Dept. investigating Southwest holiday travel meltdown

The US Transportation Department said it is in the early stages of an investigation into the Southwest Airlines holiday travel meltdown in December.
3 days ago

Sponsored Articles

Banner with Cervical Cancer Awareness Realistic Ribbon...
Intermountain Health

Five Common Causes of Cervical Cancer – and What You Can Do to Lower Your Risk

January is National Cervical Cancer Awareness month and cancer experts at Intermountain Health are working to educate women about cervical cancer, the tests that can warn women about potential cancer, and the importance of vaccination.
Kid holding a cisco fish at winterfest...
Bear Lake Convention and Visitors Bureau

Get Ready for Fun at the 2023 Bear Lake Monster Winterfest

The Bear Lake Monster Winterfest is an annual weekend event jam-packed full of fun activities the whole family can enjoy. This year the event will be held from January 27-29 at the Utah Bear Lake State Park Marina and Sunrise Resort and Event Center in Garden City, Utah. 
happy friends with sparklers at christmas dinner...
Macey's

15 Easy Christmas Dinner Ideas

We’ve scoured the web for you and narrowed down a few of our favorite Christmas dinner ideas to make your planning easy. Choose from the dishes we’ve highlighted to plan your meal or start brainstorming your own meal plan a couple of weeks before to make sure you have time to shop and prepare.
Spicy Homemade Loaded Taters Tots...
Macey's

5 Game Day Snacks for the Whole Family (with recipes!)

Try these game day snacks to make watching football at home with your family feel like a special occasion. 
Happy joyful smiling casual satisfied woman learning and communicates in sign language online using...
Sorenson

The Best Tools for Deaf and Hard-of-Hearing Workplace Success

Here are some of the best resources to make your workplace work better for Deaf and hard-of-hearing employees.
Team supporters celebrating at a tailgate party...
Macey's

8 Delicious Tailgate Foods That Require Zero Prep Work

In a hurry? These 8 tailgate foods take zero prep work, so you can fuel up and get back to what matters most: getting hyped for your favorite
Going to the store may be your smartest bet to navigate the supply chain crisis this holiday