Warehousers Beware: Peak Demand May Occur Outside the Holiday Season

As evidenced by record sales this last Black Friday, consumer demand for online shopping has never been higher. And thankfully for Christmas shoppers all over the world, retail supply chains are rebounded from pandemic levels. Walmart, Sam’s Club and Target all claimed their inventories are primed to meet peak demand, and will now have those promises put to the test as online Black Friday and Cyber Monday orders flood through the logistics pipeline.

While this is particularly timely to start the holiday shopping season, Leigh Chesley, Chief Customer Officer at Longbow Advantage, reminds retailers that warehouses need to be cognizant of changing dynamics around peak demand; peaks are no longer a seasonal phenomenon. Rather, peaks can occur at anytime throughout the year as consumers’ purchasing decisions become more fluid, thanks in large part to inflation.

Leigh’s Thoughts

“What we’re finding is that peak has almost become a year round thing. So whereas before people were really putting a lot of inventory into their warehouses leading up to peak, we’re finding that warehouses are actually much more utilized from a percentage perspective year-round as opposed to just at peak.

What we’re also seeing on the retail side is that inflation is really starting to impact how consumers are making purchasing decision. So whereas people may have had larger budgets in the past, they might be pulling back on their spending for this year, or they’re making different spending decisions where they might have bought a more premium item, they’re looking for something a little bit different.

So that’s where we’re seeing a lot of warehousing, where folks are, again, bringing that inventory up because while what may have been anticipated or expected in the past, even as folks were looking at planning a few months ago, they’re starting to see that consumers are still spending, they’re just spending differently.

And so they need to be prepared for the shifts that are happening within the consumer base, really at a real time speed so that they can adjust and make sure that they’re getting the right things either on the shelves or in the mail direct to consumers as well.”