Consumers’ Overriding Shipping Concern This Year Isn’t Speed. It’s Cost

This year's Thanksgiving was as late as it could possibly be. For retailers, that presents a time crunch for holiday sales. Cyber Monday occurred in December this year, and only 28 days separate two of the U.S.’s biggest holidays. Factor that in on top of several years of supply chain backups and shortages, and it would make sense that the shorter season would place more shipping stress on both buyers and sellers.

However, a recent Kenco survey of consumers’ holiday shopping plans suggests time is now less important than money. Seventy-nine percent of consumers said they anticipate shipping delays this season, and yet 75 percent said they would choose a free, slower delivery option over expedited shipping for a fee. So what does this mean for their buying patterns this year — and for supply chain operations?

Creating a More Cost-Effective Holiday Season

For consumers, costs will be the main driving factor this peak season. Specifically, when asked to give their top concerns going into peak season, three-quarters of consumers said their ability to afford gifts, with slow shipping times and lack of inventory at a distant 49 percent and 38 percent, respectively.

The focus on cost marks a shift from years past, as consumers now face more frustrations before they click “buy” rather than after.

While three in four consumers are willing to accept a cheaper shipping option to offset an item’s cost, that doesn’t mean retailers should ignore the customer experience. Thirty-nine percent of buyers strongly agreed they would accept a reward/incentive to choose a slower shipping time, with a gift card (76 percent), savings on the order (68 percent), and upgrades to faster shipping on a future order (35 percent) among their preferred options. This approach helps alleviate logistics burdens during the shortened season, while giving consumers a reason to return after the holidays — and you’ll have an opportunity to further build customer loyalty.

Bargain hunters also offer retailers a chance to address an ongoing post-pandemic complexity: stockpiled goods from an era of uncertainty around import delays. Introducing more buy one, get one free sales on items consuming valuable shelf space in the warehouse, or discounts on goods typically sold together, can help you right-size inventory while capturing more of your customers’ spend.

Factoring in Your Logistics Partners

Before you launch your holiday strategy, however, don’t forget that just because your customers are willing to wait longer doesn’t mean your logistics providers are under any less pressure. With approximately one week less than usual to deliver, their teams will work around the clock to meet demand. Logistics giants such as Amazon.com launching sales in October means they’ve already recruited much of the holiday labor market too, potentially leaving your 3PLs with an employee crunch.

Key your logistics team in on which items you’ll be placing on sale, and when, so they can prepare to move those products quickly. In addition, once the season is over, take some time with your warehouse/3PL management to review operational data from December. If you have a clear picture of what went right and what went wrong, you’ll be in a better position to make improvements before Q4 2025.

Balance Needs and Win the Holidays

As years of inventory shortages and shipping delays fade, consumers will look to you to help keep their holiday budgets in check — and your logistics providers will look to you for communication around your shipping strategy. Consider options such as sales on overstocked items and discounts on slower shipping that are customer/shipper win-wins, and move into this shorter peak season with confidence.

Frank Loewen is senior vice president of operations at Kenco, a supply chain management solutions provider.