Black Friday and Cyber Monday set new records in online sales and spending, totaling $24.1 billion, up from a combined total of $22.2 billion in online sales in 2023. On Black Friday, consumers spent 15% more online than last year, according to Mastercard SpendingPulse.
At the same time, according to a recent survey commissioned by Coupa, the majority of consumers are concerned about high prices this holiday season. According to the survey, 64% of consumers cited the cost of gifts as their top concern this year.
So how can consumers set new spending records while also expressing concern about affordability? And how should supply chain executives respond and prepare their strategies for next year in light of this seeming contradiction?
Higher prices mean consumers seek bigger discounts
First, the contrast between price concerns and dollars spent makes a lot of sense: As consumers feel the squeeze of inflation and express anxiety about prices, they seek out bigger sales and discounts. Given the slow creep of holiday sales to include a bigger swath of November and even December, there are more opportunities for consumers to seek discounts. Some retailers like Target and Best Buy reported lower-than-expected earnings in October, but that could have been because more shoppers were waiting for sales before spending their hard-earned money.
But for supply chain decision-makers, the shift to online buying, waiting for sales, the role of social media influencers, and other fluctuations in consumer demand, is no gentle stroll along Candy Cane Lane. That’s because, in addition to price and affordability, consumers still want quality products: According to the Coupa survey, nearly half said this was the second most important factor in their spending decisions.
Figuring out how to source quality materials while meeting cost and service standards is not a new challenge for supply leaders. However, many supply chains are still unprepared to handle the increasing complexity that the next several years will bring — whether due to tariffs or changing consumer shopping preferences. Companies that want to thrive amidst economic uncertainty must build adaptive, responsive supply chains.
Supply chain execs need to plan for potentially wild demand fluctuations year-round
A high proportion of consumer spending is still likely to occur in November and December next year, and we might see even more records break as consumers continue to shift their buying patterns. But each year will look different, especially with the uncertainty of potential tariffs coming into play. Many organizations start planning for peak shopping season six months to a year out, which means now is the time to start planning for next year.
Here’s what you can start doing to prepare for the next peak season now
In the near term, inventory optimization is key.
Inventory optimization, especially in peak season planning, helps you avoid:
- Stockouts
- Excessive transportation costs
- Lost sales
- Excess inventory
- Rush fees
Inventory optimization is part of a larger inventory management strategy that can help supply chain leaders meet fluctuating consumer demand.
In the long term, companies need to think bigger.
Fulfilling promises to customers while meeting your own business goals starts at the foundation of your supply chain: its design.
Traditional supply chains are often reactive, so when there’s a disruption in supply or an unexpected surge in demand, companies get caught off guard, end up losing sales, and experience increasing pressure on already thin operating margins.
But when you design your supply chain to be adaptive, you can get ahead of changes in demand and adjust quickly to sudden disruptions.
Enabling the adaptive supply chain is essential to thrive in an increasingly complex and unpredictable world.
