The holiday shopping season is a make-or-break period for retailers – the holidays account for a significant portion of annual revenue. Between the spectacle of Black Friday and Cyber Monday to the frenzied panic of Christmas Eve gift seekers, stress levels are high for shoppers and retailers alike. Getting it right is critical – both for shoppers seeking the perfect gift and for retailers to hit their sales targets.
US Black Friday sales rose 3.4% this year overall this year, with Cyber Monday also strong. Notably, ecommerce sales were up by 14.6% in the US this year, according to MasterCard.
Behind these figures lies a complex web of logistics strategies that ensure retailers can meet customer expectations and hit sales targets. These trends highlight consumer resilience and the need for agile logistics planning to capitalise on peak shopping – particularly as retailers need to optimise their strategies to serve an omnichannel environment.
Success relies on a detailed collaborative approach that sees retailers and supply chain partners working to navigate an industry being changed by geopolitics, sustainability and customer preferences – all against the possibility of winter weather wreaking havoc on roads and airports.
However, with retail strategies now in full flow for the holiday season, one thing we already know is that retailers are being more cautious in the way they stock their shelves. Post-COVID, stores have started to adopt leaner inventory practices to avoid overstocking and markdowns.
Supporting this shift is real-time visibility into supply chain operations. Whereas in previous years when there was always an element of excess which resulted in bigger discounts to clear stock, retailers can now be more strategic in the way they manage stock to meet demand. This will affect the prices for end customers, though, as there will be less excess inventory to sell at a discounted rate.
This kind of visibility is key in making sure retailers can prepare for the busy season beginning in November and leading up to the end of the year. As well as tracking inventory in real time, retailers are also increasingly using geo-fencing to track and expediate priority shipments. Geo-fencing triggers automatic updates throughout the supply chain so retailers know exactly where their goods are at any given time.
Geo-fencing has become a useful tool in the current climate. Even when there are disruptions in route through the Red Sea or Panama Canal for example, delays can be flagged and important deliveries can be expediated once they are through congested areas. With clearer visibility, planning becomes more of an exact science, with a lot less left to chance. Retailers and end customers are usually happier as a result.
Scaling Up: Meeting Peak Demand
The holiday shopping season requires supply chains to double their capacity without compromising on delivery times or quality. Errors are exacerbated when the quantities are increased. The stakes are high, and so is the expectation to get things right, even in the busiest period of the year.
Technology can lend a helping hand here, and with new advances coming all the time, there are more tools that supply chain stakeholders and retailers can benefit from. Warehouses can now be automated, and AI can be deployed in inventory management environments. These technologies and their integration into the end-to-end supply chain help streamline operations to handle surges in online and in-store orders.
Additionally, DP World’s end-to-end services, including origin logistics, PO management and last-mile delivery, enable scalability that responds to peaks and troughs in demand. It is important to remember that retail is a two-way street, particularly with online shopping where the rates of returns are higher. Retailers must prioritise efficient returns processes as part of their peak demand strategy. Using a logistics service that can deliver on all fronts, easing the pressure of busy periods, is critical.
Sustainability in the Shopping Surge
Of course, retail logistics isn’t just a race to the finish anymore. End customers are more discerning, and many stakeholders involved in getting finished products to consumers have more exacting requirements around sustainability.
We’re seeing more retailers shifting from air freight to more sustainable options like ocean and rail transport. We’re also seeing initiatives such as take-back programmes at major brands exemplify the shift toward reusing and recycling. Added to this is the requirement from retailers for a closed loop covering product sourcing from responsible providers, through to being able to track and trace the ingredients and components of products.
Advanced systems allow retailers to ensure products are sourced and transported responsibly, meeting consumer demand for sustainable practices. DP World supports this shift to sustainable retail logistics by intermodal solutions that reduce carbon footprints.
Glimpsing the Future of Retail Logistics
With China impacted by trade tariffs, some retailers are migrating to alternative locations for production. To build resilience, retailers are diversifying sourcing to regions like Southeast Asia, particularly Vietnam and Indonesia. But logistics shouldn’t be a static industry, and retailers need to be prepared to pivot quickly.
Advanced technologies like automation, AI and data analytics are transforming logistics by enabling predictive inventory management and real-time adjustments to disruptions. Whether offshoring, nearshoring or friendshoring, these tools help retailers quickly adapt and keep shelves stocked, while also supporting more sustainable and cost-effective logistics solutions, such as shifting volumes from air freight to ocean freight.
The logistics strategies developed during peak seasons, like the holidays, not only address immediate demand but also pave the way for a more agile and sustainable retail industry. The holiday season is the ultimate test— get it right, and it’s like you’ve won the Super Bowl, but get it wrong and it’s like you’ve fumbled at the goal line. DP World, with its customer-focused approach, helps businesses optimise their operations, providing the expertise and infrastructure needed to navigate challenges and seize opportunities.