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20 Inside Outdoor | FALL 2020 ongoing disruptions to production and distribution. In other words, make no mistake, lots of holiday shoppers will encounter the dreaded “out of stock” message. Consumers’ recent widespread experiences with product shortages at retail only add to any gift-buying panic. Consider, for example, a mid- summer poll by Mckinsey & Co. that asked shoppers about their decisions to try new brands during the past three months. The number one reason for switching brands was simply because “products were in stock,” followed by “is available where I’m shopping.” A “better price” or “better value,” typically a top factor in brand attrition, came in third and fourth, respectively. At the same time, shoppers will be faced with “holiday shipping surcharg- es” and expected delays in deliveries. Indeed, the major parcel carriers have made it pretty clear that they expect the coming rush on holiday shipping to stretch their capabilities. Word has spread of possible restrictions on ship- pers, and while “Uber-ized” employees and gig-drivers can make up some of the slack, Salesforces predicts as many as 700 million packages are at risk of being delayed this holiday sea- son, even more if waves of COVID-19 cause fulfilment centers to shut down. “We know that online shopping picks up over the holidays, and the system is already pressed to meet that sort of demand,” said Mark Mathews, vice president of research at the NRF. “If you’ve got a situation where you’re adding another 10 or 20 percent to that, which is well within the realm of a possibility, that creates real challenges.” If these two winds collide and spi- ral, retailers will encounter an abun- dance of desperate and frustrated shoppers frantically searching for something, anything, to replace the “perfect gift” that proved harder to get this year. The brands and retailers that can ease the pain of these holiday headaches with thoughtful gift sugges- tions and the ability to deliver goods, especially later in the season, will be widely welcomed and rewarded. Retail’s Dark Side Not that it will be easy. The pan- demic and reactions to it have greatly hastened the digitization of retail. We may not be seeing anything “new,” per se, but certain behaviors became “normal” sooner than most expected. BOPIS and curbside are now main- stream concepts; personalized and appointment shopping became a familiar lockdown strategy; discovery shifted almost entirely to the web for a period of time, and folks started buy- ing lots of things online that they used to buy solely or mostly in-store. Omni- shopping is suddenly full on. Even before the pandemic pushed e-commerce spending, retail non-gas/ non-grocery spending was fragment- ing into three general categories. According to a 2019 survey by Civic- Science of more than 5,000 U.S. con- sumers, about half of millennials do a majority of their shopping in-store. Just more than a quarter shopped all or mostly online, and just under a quarter said they shop half online and half in real life. Recent events sug- gest more will now fall in the latter two categories, so only a very specialized business can survive without serving all three. Maybe it’s sooner than some expected, but welcome to the market fragmentation that’s often part of a digital transformation. For most physical retailers, meet- ing the expectations of all three seg- ments will require investments in inventory transparency and manage- ment, as well as alternate “last mile” and fulfilment options. Since their inventory is on-hand and local, physi- cal retailers can leverage their stores to “bypass the bottleneck” of e-com- merce fulfilment, said Caila Schwartz, retail analysts at Salesforce. Target CEO Brian Cornell, likewise, said the retailer will stress same-day delivery and make thousands of additional items available via delivery and click- and-collect methods, including more gifts and essentials, during this “very different holiday season.” For some physical retailers, an em- phasis on curbside, pick-and-pack, lo- cal delivery and click-and-collect could be viewed as creeping toward the dreaded “dark store” model. In some ways, that’s true. In other ways, omni- channel shoppers, starting with this Top priorities when deciding where to shop in-store % of respondents for whom this criterion is the most important Source: Retail Systems Research, August survey Source: McKinsey & Co.; June 2020 Less than 6 months 6-12 months 12-18 months 18-24 months >24 months Pandemics will always be issue Cleaning and sanitization Masks and barriers Physical distancing No-contact purchasing Store regulations Health checks 31% 25% 15% 11% 10% 9% Reason for trying a new brand in the past 3 months % of respondents selecting reason in top 3 Source: McKinsey & Co. Availability Convenience Value Quality/organic Health/hygience Purpose-driven Products are in stock Is available where I’m shopping Cleaner/has better hygiene measures To support local businesses Company treats its employees well Better prices/promotions Better value Better shipping/delivery cost Larger package sizes Better quality Is natural/organic 48% 34% 30% 25% 15% 11% 16% 8% 13% 11% 6% How often have you revised operation Source: Multimedia Plus COVID Impact Survey Once Two times Three times More than three times Have not revised 0% 10% 20% 30% 40% 5 What are your (2) highest pri Source: Multimedia Plus COVID Impac Product knowledge Safety Diversity & Inclusion New systems training New operations training Leadership development 0% 10% 20% 30%