If supply chain snarls kept you from receiving items you wanted last Christmas, you’re in luck. Those items are now arriving in U.S. ports and you may be able to get them at a bargain price. The staff at SupplyChainBrain notes, “Some of the goods remain stuck at seaports and some are heading to liquidators.”[1] Here’s the rub: “All those excess retail inventories are starting to weigh on warehousing markets. … Companies are struggling to find space for the glut of apparel, kitchen appliances and other goods filling up their supply chains.” To make room for new inventory, many of America’s largest retailers are steeply discounting excess goods this summer. For example, journalists Jason Lalljee (@jasonlall9) and Madison Hoff report, “Walmart announced Monday that it will be implementing markdowns across its inventory in response to too much inventory and inflation affecting consumers’ ability to shop. … And it’s not just Walmart.”[2]
Although steep discounts on many products may be good for consumers, excess inventory has become a real headache for retailers. Retail journalist David Moin writes, “With steeper promotions and smaller gains anticipated, the 2022 holiday season will be a far cry from last year’s.”[3] He adds, “Christmas is full of doubt. Between managing inventories and costs and getting a handle on the consumer mind-set, holiday planning this year for retailers has been trickier than ever.” The truth is holiday planning for this year will be trickier than ever for all stakeholders in the supply chain. And the time to start planning was probably months ago. Nevertheless, time is getting short. As supply chain writer Cathy Roberson (@cmroberson06) reminds us, “As of August 1, there are 146 days until Christmas.”[4] She then asks, “Are you ready?”
Getting Ready for the Holidays
Orders for goods to sell this holiday season have, in most cases, already been placed. The worry for manufacturers and retailers alike is whether those ordered goods will make it to market or be stuck in some port. Between Covid lockdowns and labor shutdowns, questions remain for this holiday season. If goods do arrive, then the warehousing shortage mentioned above comes into play. Journalist Lisa Baertlein (@LisaBaertlein) explains, “America’s largest warehouse market is full as major U.S. retailers warn of slowing sales of the clothing, electronics, furniture and other goods that have packed the distribution centers east of Los Angeles. The merchandise keeps flooding in from across the Pacific, and for one of the busiest U.S. warehouse complexes, things are about to get worse.”[5] What’s making the situation worse, Baertlein writes, is the infamous “bullwhip effect,” caused by companies that “panic-ordered goods to keep shelves full and got caught out by a downturn in demand while shipments were still arriving from Asia.”
Once goods are placed into inventory, retailers will do their best to convince consumers to buy them. Getting those goods to store shelves or consumers’ homes presents another planning challenge. Roberson explains, “Planning for the parcel peak season is well underway for many shippers and carriers. The planning typically begins at the start of the year as shippers work with carriers to share updated forecasts of capacity requirements throughout the year to ensure parcels are delivered on time during the season. … However, if shippers under or overestimate their forecasted capacity requirements, they could incur a penalty from carriers. Over the past couple of years, forecasting of any kind was probably thrown out the window by most shippers. Consumers couldn’t get enough of buying goods since the pandemic occurred in 2020, and shippers struggled to keep enough inventory on hand once pre-pandemic inventories were depleted. This year, everything seems to have changed again. Consumers continue to spend but not at the same rate as in 2021 and not on the items they couldn’t get enough of last year — furniture, appliances, exercise equipment, loungewear, etc. As a result, many retailers are sitting on excess inventory.”
Today’s retailers know omnichannel operations lie at the heart of a successful holiday shopping season. And this year, like previous years, e-commerce will play an important holiday shopping role. David Fletcher (@Fletch_EcommGuy), Senior Vice President at ClearSale, reports, “Holiday 2022 retail sales are forecast to grow 3.3 percent over 2021, with a jump of more than 15 percent for e-commerce. M-commerce will comprise just under 50 percent of that e-commerce growth. Meanwhile, the Cyber Five holiday surges (the period running from Thanksgiving to Cyber Monday) are expected to give way to a ‘longer and flatter’ shopping season; prices are rising; and the supply chain is still tangled.”[6]
If, by some oversight, retailers haven’t begun their holiday season planning, they need to do some quick catch up. Rhett Power (@rhettpower), Co-Founder of Courageous Leadership, notes, “Christmas in July has taken on a new meaning over the last couple of years. No longer is it simply the unofficial holiday that imitates many of the traditions associated with Yuletide festivities. In many retail circles, it’s now the kickoff to preparing for the upcoming holiday shopping season. Because, without an early and effective plan in place, you increase the chances of not reaching your revenue goals for the year.”[7] Fletcher and Power offer a few holiday season planning suggestions they believe retailers should implement immediately. They include:
• Review and improve your customer segments and personalization. Fletcher notes, “There’s no avoiding the news about inflation. … Retailers who are concerned about the impact of price hikes on consumer spending habits this holiday can use their existing customer data now to ‘understand where price sensitivities are strongest and for which customer groups.’ This kind of analysis can help retailers match promotions and offers with the right customer segments, based on their price sensitivity.” Keeping up with changing customer behavior is a constant struggle. In the future, cognitive technologies, like the Enterra Shopper Marketing and Consumer Insights Intelligence System™, can help with this challenge.
• Plan for an extended, e-commerce-driven season. As Fletcher noted, the 2022 holiday shopping season is likely to be ‘longer and flatter’ than in years past. Power agrees. He writes, “The biggest promotions of the year almost always occur over the Thanksgiving weekend. That hasn’t changed. What has, however, is the amount spent. Between Thanksgiving Day and Cyber Monday in 2021, retailers brought in $33.9 billion in online sales — a year-over-year decline of 1.4%. Yet, at the same time, retail sales were higher than they were in 2020, up 17% in November and December 2021. The anomaly all comes down to one thing: a change in consumer shopping behavior.”
• Unify your inventory visibility across channels. Power notes, “Getting inventory ready should be a top priority. The last thing you want is for consumers to be met with out-of-stock items during the holiday shopping season, especially because there are so many competitors in the e-commerce space ready to swoop in.” Fletcher adds, “At least half of the consumers surveyed for the State of Consumer Attitudes on E-commerce, Fraud & CX 2021 report said that convenience and selection were key factors in their decision to shop online rather than in stores. When it comes to seeing what’s available and being able to find what you’re looking for, e-commerce is hard to beat — as long as the inventory data customers see is accurate.”
• Get your promotions ready to launch early. Fletcher notes, “[Today,] shoppers start buying gifts in late October or early November. … That early-shopping trend is expected to hold this year, which means your promotions need to be completely ready for launch by mid-October. You want to meet your customers with the deals and offers they expect when they’re ready to buy.” Cognitive solutions, like the Enterra Trade Promotion Optimization System™, can help. As Power notes, “AI can analyze mountains of data, often in real-time, and make accurate predictions of the products you’ll need in stock this holiday season. This ultimately allows you to be more effective in the decision-making process when preparing your inventory.”
• Review holiday shipping surcharges and delivery windows. As Roberson noted above, “If shippers under or overestimate their forecasted capacity requirements, they could incur a penalty from carriers.” And Fletcher reports that getting shipping wrong also incurs a penalty from consumers. He explains, “Sixty-nine percent of consumers reported abandoning an online cart because of shipping cost or speed, and shipping is often slower and more expensive during the holiday season. … Make sure you factor in holiday shipping delivery window changes as you plan promotions and set order-by dates. You may also need to adjust pricing because of shipping surcharges, but consumers may be more price-sensitive this year as inflation affects their budgets.”
• Optimize your customer journey for mobile. Many pundits believe retailers should implement a “mobile first” strategy. Fletcher seems to agree. He writes, “Mobile will ‘drive essentially 50 percent of e-commerce holiday sales’ in 2022, according to Insider Intelligence, and the ClearSale survey findings support that prediction. Forty percent of the consumers we surveyed always have their mobile phone with them while they shop online, while another 26 percent have their phones with them more than half the time.”
Concluding Thoughts
Power concludes, “The holiday shopping season comes but once a year. Preparation is never a bad thing, so start planning as early as possible to ensure your business experiences the sales it needs to thrive in the months between the holidays.” Retailers have a lot on their plates this year. Convincing shoppers to purchase goods that should have sold last holiday season is just one of their challenges. Thanks to inflation, the biggest selling point for such merchandise will likely be price. No one is predicting that this year’s holiday shopping season will be a bust; however, only the most creative and efficient retailers will come out winners.
Footnotes
[1] Staff, “Surging Retail Inventories Are Swamping U.S. Warehouses,” SupplyChainBrain, 4 August 2022.
[2] Jason Lalljee and Madison Hoff, “Walmart just confirmed it’s doubling down on a summer of sales, as prices for everything from department-store goods to high-end watches get deeply discounted as inventory stacks up,” Business Insider, 25 July 2025.
[3] David Moin, “Tough Holiday Season Ahead: Can Retailers Pull a Rabbit Out of a Hat?,” Women’s Wear Daily, 27 July 2022.
[4] Cathy Roberson, “146 days until Christmas – Are you ready?” Rethinking Supply Chains, 1 August 2022.
[5] Lisa Baertlein, “America’s biggest warehouse is running out of room. It’s about to get worse,” Reuters, 2 August 2022.
[6] David Fletcher, “Christmas in July: Planning the Holiday CX Strategy,” Destination CRM, 25 July 2022.
[7] Rhett Power, “3 Ways Retailers Can Effectively Prepare Now For The 2022 Holiday Season,” Forbes, 10 July 2022.
