What a difference a year makes. Twelve months ago, the retail story was all about lack of inventory and supply chain disruptions that were going to leave holiday shoppers empty-handed if they didn’t act quickly. Compared to product availability, price was more of an afterthought at the time, as reports of customers hoarding and even overpaying for hot items were common.
Today, that “out of stock” era has been replaced by the overstocked problem, with retailers in every size, category and geography slashing pricing and running promotions to incentivize the cash-strapped masses that this is the time to buy.
Where online shoppers were faced with a 32% increase in “out of stock” messages last November from the end of the second quarter, this week, PYMNTS reported that retailers have so much stuff on hand that there’s actually a shortage of warehouse space to store it all.
It’s a problem that’s not only sparking demand for fulfillment center automation and robotics upgrades, but one that is also serving as yet another cost increase — especially on the shoulders of smaller retailers — on merchants who are already getting squeezed by historically high inflation.
In short, with cooling September jobs data, rising interest rates, stocks in a bear market and PYMNTS data reflecting a giant consumer shift toward essentials and away from discretionary purchases, $100 off a 5-foot-wide TV set is a hard sell, to say the least.
But Wait, There’s More
To be sure, just because it’s hard out there doesn’t mean Amazon, Walmart, Target and all of their major peers and rivals won’t try, as all three brands are either in, or fast approaching, their own variation of holiday sales event. The fact that these promotions are now happening earlier than ever, is not only proof that the 20-year concept known as “the Christmas Creep” is real, but underscores the reality that retailers are more focused than ever to make this year — the third consecutive such season facing outsized challenges — a success, or at the very least, not a washout.
One such effort unveiled this week was the debut of Amazon Access, a suite of new value-hunting tools and tabs that the eCommerce giant put together in hopes of making it easier for consumers to find value and save money. At the heart of that program was the eTailer’s push to bring old-fashioned lay-away out of storage and make it available to online shoppers for the first time.
“We found that many of our customers are looking for ways to save money and time, now more than ever. We know that online shopping is a big part of how they save, and that’s why we’re introducing Amazon Access, a hub to make shopping easier for all customers,” Amazon said in its Monday announcement, which also elevated ways for lower income consumers to use their SNAP or EBT benefits.
Robotics and Roblox
For its part, Walmart not only announced its Rollbacks answer to Amazon and Target’s sales days, but also debuted a pair of new tech undertakings aimed at reaching new customers and serving existing ones more quickly.
On the former, Walmart announced a metaverse joint venture with Roblox that is aimed at reaching a slice of the 50 million users that spend time in site’s virtual worlds each day.
“Roblox is one of the fastest growing and largest platforms in the metaverse, and we know our customers are spending loads of time there,” William White, chief marketing officer at Walmart, said last month. “We’re focusing on creating new and innovative experiences that excite them.”
On the latter, the largest operator of physical stores in the US announced its acquisition of robotics automation company Alert Innovation, as part of its bid to improve its omnichannel fulfillment capabilities.
“Further investing in this technology will enable us to leverage our store footprint — 4,700 stores located within 10 miles of 90% of the U.S. population — for storage and fulfillment,” David Guggina, senior vice president of innovation and automation at Walmart U.S., said of the deal, noting its intention to fulfill orders quickly and conveniently through pickup and delivery, while allowing customers to receive their purchases when and where they want.
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