Are beauty brands ready for the last-minute holiday rush?
In the run up to last year’s holiday season, many of the UK’s beauty brands were primarily concerned with reducing pandemic-related inventory backlogs and meeting demand driven by consumers’ pent-up savings. Twelve months later, these same brands are facing a different landscape altogether. The mood music has changed this peak: With rising interest rates, inflation and other economic pressures, there are talks of a more muted holiday shopping season. And yet a recent Barclays report states that inflationary pressures notwithstanding, consumers are still willing to spend on non-essentials, while a Kantar survey recently found that adults’ propensity to increase their spending around Christmas remains largely buoyant.
Health & beauty is widely expected to be one of the strongest-performing categories according to the Retail Economics Outlook for Christmas 2023 report. Consumers are looking for feel-good factor treats and little luxuries like cosmetics fit the bill. It's forecast that four per cent of consumers will increase their spending on beauty in the run-up to Christmas.
While it remains to be seen whether the holiday shopping season will be muted, we are likely to see consumers deferring expenditure until the last minute. Indeed, PwC research notes, “aware that a pre-season of holiday deals is increasingly becoming the norm, [customers] are biding their time while waiting for the best deals.” So, what are the implications for retailers of this trend towards last-minute purchasing?
Perhaps the most obvious is that the holiday season will be busy and customer appetites will remain high. This is good news – but it’s not ideal for brands planning for peak. It means their teams and capacities will be tested up to the last minute, yet deliveries cannot be delayed because customer expectations of speedy fulfilment will remain. Add to this the potential for carriers to cap their deliveries to avoid the chaos of 2022 and beauty brands are left in a difficult position. They will need to either stretch teams and resources beyond their limits but risk jeopardising operations in the long term; or work at normal capacity but risk not fulfilling Christmas orders on time. Clearly, neither outcome is desirable.
It's in instances like this that beauty brands turn to GXO for seamless support during the holiday shopping season. After all, we have in-depth beauty and luxury expertise matched with a broad range of world-class logistics solutions, spanning warehousing and transportation, to enhance the supply chains of beauty brands of all sizes – including in times of temporary and seasonal change.
Clicklink is our premier Click & Collect solution, a world-class delivery network built for retailers by retailers. Unlike parcel carriers, Clicklink bridges brands’ online ecosystems with their brick-and-mortar presence. A customer can order their last-minute gifts on December 23 and collect them in store the following day, just in time for Christmas. For beauty brands, Clicklink is beneficial because it makes planning easier – the delivery network can even carry out daily stock drops into key stores – and it facilitates an in-person touchpoint with the customer. These interactions can then open opportunities for upselling and cross-selling, which adds to brands’ sales.
At the backend, there are other benefits for beauty brands and wider society too. With Clicklink, we can batch together different retailers’ orders for a more efficient and cost-effective delivery solution which further benefits the high street by reducing the number of vehicles. Whereas a single retailer may deploy significant resources for the delivery of a handful of orders, we can pool together their delivery with other brands in the same locale and achieve next-day delivery for all. GXO Clicklink is a consolidated retail delivery solution, supporting omnichannel ambitions. Beyond the clear financial benefits to retailers, there are carbon emissions savings here too: fewer trips required for a comparable volume of deliveries.
Meanwhile, GXO’s shared warehousing solution GXO Direct enables beauty brands to tap into resources that can be scaled up or down with demand. Thanks to fast, cost-effective deployment, GXO Direct offers beauty brands that much needed flexibility – ramping up to meet that last-minute purchasing peak ahead of Christmas and setting up for success in the new year.
A more compressed peak holiday shopping season is a challenge which – with the right preparation and logistics partner – can be turned into a great opportunity. Beauty brands cannot enter this year’s holiday season with last year’s tools and tactics – agility and adaptation are key. GXO can help its clients to achieve this agility and fully meet unpredictable consumer demand.
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