New Retail and Supply Chain Confidence Report Reveals Key Insights for the 2024 Holiday Season
Inflation, inventory, and AI-driven strategies to shape peak season
As the 2024 holiday season approaches, retailers and supply chain leaders face significant challenges influenced by inflation, inventory management concerns, and changing consumer behaviours. New global research from Manhattan Associates Inc. (NASDAQ: MANH), ‘2024 Supply Chain Confidence Survey’, provides a comprehensive look at these dynamics, revealing how retailers are preparing for one of the busiest shopping periods of the year.
The survey, conducted between August 23 and September 6, 2024, gathered insights from 500 senior retail and supply chain executives and 500 consumers globally, creating a detailed snapshot of the trends shaping the season.
Inflation pressures prompt early shopping and strategic spending
Inflation continues to impact both consumers and retailers, prompting shifts in spending behaviour. According to the survey, 93% of consumers report that rising prices have influenced their holiday shopping plans, leading many to adjust their budgets. Consumers are spreading their spending over an extended period, with nearly 40% planning to start shopping earlier than usual to take advantage of sales, and 26% aiming to begin holiday shopping as early as October.
This trend is expected to help consumers manage costs by pacing their purchases over a longer timeframe. Retailers, too, are adapting to these shifts, with 70% anticipating higher operational costs this season due to inflation and shipping expenses.
“This year, we’re seeing a growing trend toward early shopping as people try to manage their finances in light of inflation,” explained Raghav Sibal, Managing Director for Australia and New Zealand at Manhattan Associates explained. “Retailers are adjusting their inventory and promotional strategies accordingly to accommodate consumers’ needs to stretch their budgets across a longer period.”
Inventory concerns drive strategic preparations
Inventory concerns are also front and centre for both retailers and supply chain leaders. While a substantial 87% of retailers have taken proactive steps to ensure that trending products are stocked for peak demand, nearly 40% still express apprehension about having enough inventory to meet consumer expectations.
"Economic uncertainty is definitely adding layers of complexity, with nearly 70% of supply chain leaders viewing inflation and shifting economic trends as a greater concern than geopolitical or infrastructure issues," said Sibal. "Even with rigorous planning, maintaining adequate inventory remains one of the most challenging tasks this season."
Technology investments increase to navigate peak season demands
A softening labour market also adds another hurdle to the holiday season. Retailers are reducing their reliance on seasonal hires, with 44% planning fewer temporary staff and 68% considering seasonal hiring a low priority. In contrast, supply chain leaders are choosing to increase workforce capacity, with 58% committing to additional hires to meet anticipated peak demand.
“Technology is truly the backbone of this year’s holiday strategy for many retailers,” said Sibal. “With automation helping to manage workforce constraints and ensure seamless operations during peak periods, we’re witnessing substantial investments across supply chain functions. About 60% of leaders are embracing innovative tools to enhance efficiency and adaptability in both inventory management and customer service. In particular, AI will be essential this season, enabling retailers to quickly respond to demand shifts and optimise operations during the busiest times,” he concluded.
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