Retailers juggling inflation, inventory and staffing woes this holiday season

The 2022 holiday shopping season certainly has its challenges. With skyrocketing inflation, inventory issues and workforce shortages there have been many issues that retailers have had to overcome. 

That doesn’t mean it’s been a bad season so far. 

According to the National Retail Federation, a record 196.7 million Americans shopped in stores and online during the five-day holiday shopping period from Thanksgiving Day through Cyber Monday. 

Denise Ogden, marketing professor at Penn State Lehigh Valley, said inflation is definitely impacting holiday shopping habits, but that doesn’t mean people are necessarily shopping less. 

“It’s just that that amount of money isn’t buying the same amount of gifts,” she said. 

Higher prices mean consumers are being much more price sensitive. 

“Shoppers are really looking for the bargains,” she said. 

And thanks to supply chain issues last year, savvy consumers will be able to find some bargains among the higher prices. 

She said many retailers are dealing with overstock of items that were supposed to ship last year but were held up in port or delayed by other supply chain issues. 

“The problem is, it’s the wrong stuff,” she said. 

Especially with items like clothing and other fashion-dependent goods, last year’s inventory isn’t as attractive to shoppers and many retailers are overstocked with it, so those willing to buy last year’s holiday sweaters might find some good deals. 

Because prices are higher, Ogden said retailers are trying new – or rather old – ways to help customers afford gifts. 

“Layaway is back,” she said. “Even Amazon has a form of layaway, and many retailers are offering buy now pay later payment plans – especially on larger ticket items.” 

She said progressive leasing is also becoming popular, but that can come with risks. 

“If you skip a payment everything can be due immediately or maybe face increased interest,” she said. 

Mostly, she said it’s just about retailers making it easier for consumers to make purchases. 

That’s brought back another old trend. She said the old Kmart concept of “Blue Light” specials are being brought back. 

She said flash sales, both in store and online, are proving to be a good way to build excitement and get shoppers to make that impulse buy. 

Retailers are also pushing new ways to help make shopping easier. Curbside pickup, where customers can buy online and then pick up an item at the closest store is becoming increasingly popular. 

And after shunning bricks and mortar stores during the height of the pandemic, Ogden said consumers are beginning to return to stores, with in-person shopping up about 3% over last year. 

One thing that wasn’t as big this shopping season was Black Friday. 

“Black Friday isn’t what it used to be,” said Ogden. “It used to be a single day, now it’s more of a whole season with some sales starting as early as October.” 

She noted that even Amazon added a second Prime Day. 

But as retailers look to improve the shopping experience, the biggest hurdle remains staffing issues. 

Getting workers has been an ongoing challenge, and shoppers may face longer lines or lapses in customer service because of a lack of staff. 

That can be a problem for retailers. 

Research conducted by the consulting firm, Steritech, showed that 4 in 10 consumers, or 39%, would not return to a store after an unsatisfactory visit. 

The study, which was a survey of 3,000 North Americans about food and retail brands, said that poor customer service could be costing North American businesses over $200 billion every year. 

But Ogden said that could be good news for smaller retailers.  

Smaller businesses, many of which are owner-operated, can offer better customer service and lure the customers that may have been turned off by the poor service they received elsewhere. It’s all about making the best of this year’s challenges.