Don’t let this be The Year Without a Christmas for your customers. Here’s everything you need to know about holiday cutoff dates.
We’re all familiar with Christmas in July. What about Christmas in August? Or maybe, November?
Holiday cutoff dates are already here for retailers. Last year, amidst a pretty chaotic peak season, carriers advised a December 5th cutoff date for those holiday orders. What we know is that, while many carriers for 2021 have updated those days to December 9th – 11th as a cutoff for their ground transportation, there’s a lot of questions around what stock is going to be available to fulfill those orders. Historically, shippers relied on carriers to communicate holiday cutoff deadlines, but this year you need to look to suppliers.
SwanLeap’s Brand Evangelist, Ben Weger, illustrates an example. “Consider Walmart. Typically, their summer items arrive at the distribution centers between January and February.” Weger explains, “This year, it was March to July. Ocean carriers are already advising retailers to order by August 21st if they want items on the shelves by December. You can see how this narrative is starting to shift — no longer so subjected to the carrier demands but being surpassed by the supplier demands.”
The most significant factor in determining holiday cutoff dates is how much stock will be available to fulfill orders.
The cost of containers is up over 200% over the last few months which indicates high demand. If you’re in the e-tailer business, you know the last few months are not exactly “peak season”. As people become accustomed to 8 week lead-times even in an off-peak season, shippers need to think ahead and manage customer expectations in terms of order times, delivery times, and cut-off dates because we’re heading into an unprecedented (yes, we used that word again) 2021 holiday season. The closer you get to November, the higher shipping costs will be.
In 2020, as shippers were trying to manage ground transportation within the lower 48 states, they found themselves hindered by an election year. “USPS was slammed with a lot more volume than they would normally have in a year like this one, 2021.” Weger assesses. “We want to encourage you to look at USPS as an option, as well as ground transportation as a whole. We know that it will be more reliable this year.”
Weger offers another perspective, “I used to get my grandparents’ request for Christmas lists in November. If you’re a grandparent, you probably already sent out those Christmas list requests wanting to know what do those kids want this year? People are primed with that message ‘buy early!’. We know we need to get those orders in to be able to get that product in time for a deadline. We need, again, to start looking at suppliers for these deadlines, as opposed to carriers. People know to order early and this is going to deplete stock more quickly.”
Once holiday goods are ordered, retailers will have already started demand planning for the next season, evaluating what was bought this year to estimate what will need to be ordered for next year. This earlier life cycle of ordering creates a much shorter lifespan for items on the shelf. As companies begin to shift at the end of October into demand planning for 2022, it’s going to be very difficult to get holiday items if you haven’t already made those orders. “Based on what we’ve seen from UPS and FedEx in their Peak surcharges coming out, we believe that October is going to be a very heavy month for imports,” Weger suggests. Add this to the heavy parcel traffic as we head into the holiday season…we’ve got trouble in the making. “Even with a December cut off date last year, packages were still late.” Weger recalls. “Most carriers said December 5th — that’s really early! That’s 20 days ahead of “the most important day of the year in e-commerce.””
The fact of the matter is: you have customers asking for things that they want delivered in time for the holidays.
So what do you do? Here at SwanLeap, we recommend that you start communicating to customers a cutoff date of November 1st . “That may seem extreme,” Weger acknowledges, “but you can incentivize these in tiers, whether that’s through discounts and shipping, incentivizing choosing certain levels of shipping, or maybe it becomes date incentivized.” These are different ways to start to pull your customers in and get those orders in early. Consider the following promotions.
- If you get your orders in by November 1st, you get X percent off.
- If you get your orders in by November 15th, you get X percent off.
- If you choose ground service on any item shipped before November 15th, you get X percent off.
Chances are, November 1st, your customers know what they’re going to order (or they could know what they’re going to order). But the human condition is to procrastinate. If you start to ask for those orders earlier and incentivize service levels that are more reliable, you can manage the flow of your supply chain to ensure success for the 2021 holiday season.