With Black Friday just a few days away, it is fair to say consumers are likely getting ready to crank things up a gear for holiday shopping. While malls are likely to be crowded as per the usual at that time of year, the advent of omnichannel shopping options for consumers provides other shopping options for those not ready or willing to deal with chaotic malls and shopping centers.
Recent research issued from global commercial real estate firm JLL notes that as consumer shopping habits have shifted in recent years, with many shoppers looking for alternatives to the pandemonium associated with Black Friday crowds and pre-sunrise store operating hours, retailers have taken some different approaches, including increased promotional e-mail designed to create a sense of urgency and cross-selling opportunities to shift attention and online traffic to Cyber Monday.
In its report, entitled “Grey is the new Black,” JLL takes a close look at supply chain-related trends that can influence retailers’ approaches to Black Friday, including:
-variety and new options in delivery options that will emerge and disrupt how consumers approach Black Friday purchasing decisions, such as AmazonFlex, GoogleExpress, and UberRUSH that can rush orders out from fulfillment centers or retail backrooms and provide consumers with fast delivery and convenience of orders in urban and core suburban areas;
-retailers using “dead zone retail spaces” that blur the start of the storefront and supply chains as seasonal or mobile “pick up” or “pop up” locations throughout urban areas continue to emerge, and retailers and e-tailers are using this approach to alleviate increased holiday order demand and related bottlenecks;
-leveraging vacant or under-utilized retail space as a temporary pick-up location or online shoppers wanting to avoid large Black Friday crowds or as micro distribution centers in which early morning or late-night deliveries are made from large hubs to in-fill urban locations;
-the blurring of Black Friday into “Grey Thursday” as early hour openings for the former have moved to late night starts for the former, and JLL said if stores are closed on Thanksgiving, shoppers need to buy online to get the same deals, with increased supply chain flexibility needed to handle the increased traffic
Aaron Ahlburn, JLL director of research for industrial and retail property markets, said in an interview that as consumer expectations change, retailers are continuing to adapt, with JLL maintaining that Black Friday shifting from more broadly in that it is not just about one day anymore and it is more about the entire takeoff of the shopping season.
That is also playing out in terms of service levels as they relate to the supply chain, too, he explained.
“Retailers are adapting to what consumers want so if it is a matter of the last-mile delivery and getting goods to consumers as fast as possible or a matter of providing the level of service that is expected nowadays in the form of things like free shipping or quick delivery, which is what we are really looking at,” said Ahlburn. “The reality behind that is changing, too. If it is a matter of last-mile, then it is a matter of being close to the customer.”
In regards to vacant or under-utilized space being used as micro-distribution centers, Ahlburn said it has been much more prevalent in Europe than in the U.S., although it is starting to gain more traction in the U.S., due to the service and convenience factors it brings.
“It will depend on the type of retail and type of retailer having the right footprint to make that happen,” he said. “Certain retailers might be able to capitalize on that, while others may not be able to do so without the right footprint.”
When asked about what retailers need to focus on at this time of year to ensure things are running properly and smoothly as things are set to significantly ramp up, Ahlburn summer it up in one word: service.
“Every year we go through this with a new holiday season, and there are levels of service for anything about expectations for free shipping or delivery within a certain amount of time that seems to always be incrementally increasing in what people expect from they retailers they are buying from,” said Ahlburn.