5 Retail Logistics Trends to Watch in 2018

With the holiday season upon us, we explore the top trends impacting the retail supply chain right now and discuss a few future trends for 2018.

With Black Friday and Cyber Monday in their rearview mirrors, retailers and their logistics providers are now preparing for a brisk holiday shopping season by stocking up, securing transportation capacity, and prepping their warehouses for the predicted rush. This year, research firm eMarketer expects US retail e-commerce sales to jump 16.6% during the 2017 holiday season, driven by increases in mobile commerce and the intensifying online battle between large retailers and digital marketplaces.

At the same time, total retail sales will grow a moderate 3.1%, as retailers continue to experience heavy discounting during the core holiday shopping months. “Though moderate, growth in total retail sales during this year’s holiday shopping season will be buoyed by strong consumer confidence, low unemployment, and solid economic performance,” eMarketer points out, noting that e-commerce’s share of total retail sales during the 2017 holiday shopping season will reach a record 11.5%.

Here are five retail trends to watch during the holiday season and in 2018:

The peak holiday season is getting longer and longer. According to eMarketer, the timeframe of the holiday season continues to lengthen. Nearly a third of holiday gift buyers polled in 2016 said they started their shopping in October or earlier. In 2017, even more shoppers started early, the firm reports. This presents both opportunities and challenges for retailers who need to shore up their logistics and transportation approaches well ahead of the shopping kickoff date in October (something to think about as you are planning for 2018).
Winter weather could impact the holiday season. The weather forecasts suggest that we could be in for a colder winter this year, according to 4 Predictions for the 2017 Holiday Shopping Season. Shippers should be ready to scale back (or up) as needed, should this forecast come to fruition. By keeping an eye on the forecast and working with your logistics provider to orchestrate any last-minute maneuvering, you’ll be well braced to manage any related order fluctuations.
Mobile commerce is growing in leaps and bounds. In 2014, mobile commerce (m-commerce) comprised 11.6% of the $303 billion in total U.S. e-commerce sales. By 2020, that number is expected to reach $284 billion, or 45% of the total U.S. e-commerce market. This evolution is going to be a big driver of e-commerce sales, eMarketer notes, particularly smartphone commerce, which rose by an estimated 57.8% in 2017 overall. Expect this trend to continue as more consumers reach for their smartphones to place orders instead of sitting down at a desktop or laptop.
The omni-channel revolution is in full swing. There was a time when customers had to return online purchases online and in-store purchases in the retail stores where they bought them. The same customers had to wait a few days for an online order to arrive, while their brick-and-mortar counterparts had to drive to a retail outlet to purchase their goods in-person. Omni-channel retail, or a sales approach that provides the customer with a seamless shopping experience (whether the customer is shopping online from a desktop or mobile device, by telephone or in a bricks-and-mortar store), has changed all of that. This, in turn, has changed the way retailers handle their order fulfillment, warehousing, and distribution. “Consumers expect variable fulfillment options,” eMarketer reports, “as half now buy online and pick up in-store.”
Despite the predictions, the brick-and-mortar retail store is not dead. The nation’s shopping malls and retail stores may be morphing and consolidating, but they’re not going away anytime soon. “The rumors of the death of the store are greatly exaggerated,” NYU Clinical Professor Peter Galloway told the National Retail Federation. “There are just too many stores, and people have combined that with the idea that stores are ‘obsolete.’ It’s just not true.” In fact, he says successful retail models that have evolved with the consumer are those with a focus on creating experiences and providing expertise. “Consumers are no longer going to the store for product, they’re going for people. You’re going to see rationalization of square footage, but you’re probably going to see more cost or more investment per square foot in the ones [that] survive.”