Reuters Events | Supply Chain & Logistics Business Intelligence

Shoppers much more bargain conscious this holiday season and holding out for deals according to research, driving retailers to seek out cost savings in supply chains

Holiday shopping habits are undergoing a substantial shift this year, as consumers are shortening their purchasing windows, becoming more price conscious, focusing on free shipping and looking at more online purchases. This is putting pressure on logistics operations during this critical season.

Cost-conscious consumers

According to the Celigo Holiday Shopping Trends Report 85% of respondents to a global survey say they are either "very price conscious" or "fairly price conscious" when it comes to their holiday shopping this year, and 61% said it is their most important criteria. Similarly, Manhattan Associates 2024 Supply Chain Confidence Survey found that 85% of US consumers are concerned about increased prices, while 70% of US retailers are anticipating higher costs in the holiday period.

This is leading to more cost-sensitive purchasing habits and smaller overall spend. Some 62% of consumers in Celigo’s survey think they will spend under $1,000 this year, compared to 49% who said the same in 2023.

Manhattan Associate’s research also found that 64% of consumers say they are cutting their spending on non-essential goods due to inflation and 52% are willing to wait for goods to be discounted, prioritising these deals over other shopping criteria.

A shorter shopping window focused on major e-tailers

These factors are pushing the shopping window back, as 53% of consumer in Celigo’s survey said their shopping would starting in October and a third said it would take place only in November and December, notably later than in 2023 when half of respondents said they would begin purchasing in September.

This compressed purchasing window is going to be more concentrated on major online retailers than last year. Over half – 52% – of shoppers reported that they would spend less than six hours conducting their shopping, 49% said they would purchase more online than last year and 73% of consumers reported that they will shop on Amazon, eBay, and other online marketplaces over independent merchants, a 20% rise over 2023.

Retailers hope to streamline their operations

This downward pressure from deal-conscious consumers is feeding through to supply chains, where automation and artificial intelligence are seen as key aids to meeting consumer demand without increasing operating costs, especially as free shipping and returns remain key priorities for cash-strapped consumers.

Celigo’s survey found that just under half of consumer anticipate returning a gift this year, rising to 54% of those under 34, and Manhattan Associates research noted that 65% of consumer rate free shipping a key priority.

Therefore, 61% of retailers reported making investments into new technologies to improve efficiency according to Manhattan Associates, with 42% using advanced automation to process last-minute order surges and 35% to ‘hedge against rising costs’. Eighty percent of retailers said that they are utilising AI for inventory management, demand forecasting, and customer service

Some 44% of retailers hope these technologies this will allow them to reduce seasonal hires, but this contrasts with logistics sectors respondents, the majority of whom – 58% – are expanding their seasonal workforce, reflecting the growing demand for online shopping fulfilled through third party logistics and via major marketplaces.