Inflation, supply chain, BFCM, and your customers

The holiday season for merchants is stressful. Inventory management, sales forecasting, planning logistics, customer support, marketing campaigns, juggling different holidays and PTO. 

The holiday season for customers is also stressful. Looking at household income over the months leading up to the holiday season to plan budgets, those plans changing because of unexpected costs, researching gifts and figuring out when to buy them to align with their budget, shipping delays, last-minute gifts, which gifts they’ll need to buy in-store vs online. 

When we talk about all the issues currently impacting the holidays, we focus a lot on businesses. This isn’t unreasonable, we have to talk about how retailers can navigate the difficult issues we’re currently facing. But we do need to ensure we don’t lose sight of why this is also difficult for customers. 

Bloomberg recently reported on research suggesting US consumer holiday spending will be lower this year due to current inflation rates. In spite of this, holiday spending will remain at a record high. The demand is still there, customers will still spend and celebrate. Another finding in the same article is that gift cards are expected to make up a larger portion of holiday budgets than previous years. 

Why is that? An educated guess would be that not only are consumers more frequently asking for gift cards in lieu of a physical gift, but they’re also highly aware of ongoing supply chain issues.

Global food prices are close to a record high. Freight costs are up, labor shortages are getting desperate. Customers aren’t blind to these issues, they’re arguably impacted the most by them. Empty shelves in grocery stores, long restock estimates, delays in shipping - just as much as your business may be feeling the supply chain pinch, your customers are too.

So when your customers are faced with shortages and delays along with tighter budgets, what can you do as a business? 

How can merchants best respond?

First and foremost, in any actions you take or activity you choose to do you need to remain empathetic and sensitive to the needs of your customers. Supply chain issues will of course be a major concern for merchants in running their businesses. The stresses of delayed inventory, the worry of losing customers, the notion that you may fall short of sales targets - these are all legitimate concerns. However your customers are also facing all the issues discussed above, from the more serious issues like energy shortages and rising inflation, to more personal concerns about not being able to have holiday gifts arrive on time. Take into account the problems and issues your customers face, and think about what you can do to help even in a small way. When you face a snag in your supply chain, consider how that will impact customers and the best response that will help both your team and customers. This will better serve your business in the long run, as customers from this period will know from experience that your store cares about their needs. 

In terms of action that may help, you may consider bringing your promotional activity forward so that customers can grab a good deal outside of Black Friday to help ease their concerns about gifts not arriving in time or running out of stock. This also helps to ease the pressure on your fulfillment and customer support teams as we progress through the holiday season. Rather than processing all your promotional orders over the same short period after BFCM, you can better plan logistics if they come in smaller bursts. Moreover if some of your customers buy earlier, there will be fewer customers down the road who are worried about their orders arriving and therefore fewer support tickets on these issues. It also has the potential to help with holiday budgeting, as customers may be able to spread out their sale shopping throughout the month rather than all at once over Black Friday weekend.

Another way to help ease holiday stress for customers is through offering gift cards. As mentioned above, it’s expected that gift card spending is going to increase this holiday season. People know there are supply issues, so they’ll be more interested in gift cards that don’t rely on a product being available immediately. They also know that if they’re affected by inflation and empty shelves, their friends and family will be too. Gift cards allow the recipient to pick whatever they want whenever they want, choosing something for themselves that they may not normally splurge on. 

It also helps ease your business’ inventory management. If you’re running low on stock or are out of stock completely on some of your best sellers, gift cards help to bridge the seasonal supply gap. People who receive gift cards typically don’t use them right away - around half of consumers plan to redeem within a month of receiving one. Therefore, if the item they want isn’t available they may be more patient as they’re using the gift card to purchase something for themselves which doesn’t carry the same time constraints as the person who purchased the gift card. This gives merchants additional time to replenish inventory, plan out logistics, and promote their products to gift card recipients in the weeks following the holiday season.

Finally, merchants should reward loyalty within their customer base. This is all part of being sensitive to issues that your customers may be facing, and showing appreciation by recognizing their continued loyalty to your store. Everyone likes to feel appreciated by the brands they love and shop with, especially around the holidays. You can do this in a number of ways, such as bonus loyalty reward points, early access to sales or bonus discounts, shipping upgrades, and gift cards. These small gestures will demonstrate to your VIP customers that your store cares about their continued loyalty and foster that positive relationship.


The holidays are often stressful for a number of reasons, however it’s also important to remember the positivity that comes with this time of the year. At the end of the day people want to buy gifts to show their appreciation and love for those around them. They’re worried about the supply chain, because they’re worried about being able to find and give that perfect gift. Remembering this, being sensitive to it, and coming up with solutions for your customers will be the best way for merchants to help their customers navigate through a tricky holiday season.

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