It’s never too early to prep for your holiday sales volume, but as every eCommerce leader knows, it can quickly become too late. Looking at the current state of the market and global supply chains, Red Stag Fulfillment believes that the implications of inflation and potential supply chain disruption mean that this year, it’s more important than ever to push your holiday sales as early as possible.
Freight rates are cooling ahead of a rise
Spot rates for containers dropped nearly 30% in lanes from China/East Asia to the U.S. West Coast between May 20 and June 10. In roughly the same timeframe, inbound container volume to the U.S. declined 36%. That likely shows a volume decline based on companies’ current inventory excess, but this doesn’t preclude a peak season rise in volume or rates.
Many predicted a surge of containers from Shanghai after the port reopened, but it turns out that much of this volume was already successfully rerouted through other locations. There’s a window of opportunity for expansive eCommerce companies with growth potential to reconsider production and inventory volumes ahead of year-end demand. Dropping rates and dwindling demand will likely give companies greater leverage to secure significant rate reductions as carriers look to generate gains in the spot market.
This further cuts against some of the “hype” surrounding reshoring, presenting you with a more significant opportunity to maximize 2022 investments.
Inflation is the newest competitor
Last month, the Consumer Price Index (CPI) rose 9.1% from a year earlier, the largest gain since 1981 for the inflation gauge. Increases in food, housing, and gasoline were leading factors. From a business perspective, it’s time to think of inflation and CPI increases as direct competitors because of their impact on real wages.
Your shoppers have less money to spend, so they will look longer to find the best deals. Red Stag is encouraging our clients and partners to start thinking about ordering and positioning your holiday inventory volume now because the current dip in freight rates can lower the total cost of ownership. You still have time to inbound inventory and avoid some peak surcharges, limiting the need to raise product pricing.
Staging goods now (based on current trends and your 2021 holiday buyer data) may reduce shipping zones for last-mile fulfillment, increasing your potential savings. It also positions you to offer better deals and deeper discounts to land those stressed-out shoppers when they’re ready to buy.
Holiday sales will happen early
Uncertainty isn’t just a problem for operations and internal departments. It’s a frustration for consumers, too. Ongoing disruptions and slowdowns will keep 2021 holiday delays top of mind for shoppers who want to avoid repeat issues. They want gifts to arrive in time for celebrations. The easiest way to achieve that is to start ordering much sooner than in a typical year.
If you’ve secured inventory and are staging it now, you can respond that much more quickly. Black Friday and Cyber Monday are still significant sales events, but there’s no good reason to wait for them and risk missing out on early purchases. You could also use the opportunity to differentiate yourself with an early sale. Some predictions say mobile eCommerce will lead overall sales growth in 2022, but thankfully we can fill those orders just as quickly as any standard marketplace.
The space and speed you need
Most current news and analyses predicting 2022 year-end sales volumes rely heavily on the author’s crystal ball. We don’t see that being the case in two places: shoppers still want fast fulfillment, and companies increasing inventory levels need more space. Red Stag is positioned to offer you both — and can even help new partners secure these ahead of the 2022 holiday shopping season.
Our proven solution was delivered to partners last year, even during peak. Some 99.976% of orders left Red Stag warehouses correctly and accurately during peak in December 2021, helping us achieve a 99.993% accuracy rate for the year. We provided a 99.959% on-time rate last December and a 99.997% inventory accuracy for all items in and passing through our facilities. Pair that with our Sweetwater campus adding more than 700,000 sq. ft. of capacity and you’ve got a recipe for reliability and service your customers will be thankful for during holiday 2022 and beyond.
Holiday sales can be challenging, especially during uncertain times. Let Red Stag Fulfillment make it easier by giving you a custom national fulfillment strategy designed to satisfy your customers and your budget.