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The Importance of a strong pallet company this holiday season.

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Blog Cover Strong Pallet Company Holiday Season

We are truly living in unprecedented times. The COVID-19 global pandemic has, one way or another, affected every industry and supply chain on our planet.  All indicators are signaling that the retail space will also experience a holiday shopping season like never before. During this year’s holiday season, it is important to remember that having a strong pallet company in your corner can help prevent large bottlenecks and common pain-points your business may experience when sourcing wood pallets.

 

The Largest Impacts of COVID-19 on Holiday Shopping

Longer Shopping Season

While the peak holiday shopping days have continuously evolved and grew longer over the past several years – the transformation this year will be the most dramatic yet.

Due to COVID19, Brick-and-mortar retailers and e-commerce platforms are introducing longer sales periods to help avoid crowds, avoid product scarcity, and optimize delivery timeframes for online orders. Some retailers have already begun holiday / “Black Friday” deals as of the date this article is being published. Amazon wrapped up their “Prime Day” on October 14th and only waited a few days before launching their “Holiday Dash” campaign that promises “Black Friday”-like prices. Amazon’s Holiday Dash will go through November 19th and lead directly into the retailer’s Black Friday Deals Week. Other retailer giants such as Costco, Kohl’s, and Macy’s are following suit and offering large holiday discounts well before the traditional start.

Consumers are on-board for the early shopping as a survey published by Statista reports that 61% of consumers will start their holiday shopping before Thanksgiving

The Rise of Omnichannel Logistics

Omnichannel Logistics is something that has been around for quite some time. However, due to the impact COVID-19 has had on consumer behavior and shopping restrictions, more retailers than ever are opting to implement omnichannel logistics and distribution.

Many retailers are now offering in-store pickup or delivery services to help those that are uneasy about spending time amongst crowds in brick-and-mortar stores or living in areas where there is limited capacity for in-person shopping.

E-Commerce Dominance

E-Commerce retailers have been one of the most positively affected businesses during this entire pandemic.

In October, Amazon reported record setting third-quarter earnings totaling $96.1 billion. This number is the largest for any three-month period in the company’s history and a 37% increase year-over-year.

Amazon, and other e-commerce platforms, are showing signs that this figure will only grow during the holiday season.

 


Last year, the National Retail Federation reported a record growth of 14% for holiday e-commerce sales – which totaled $167.8 billion. This year, CBRE Retail Research forecasts 2020 holiday e-commerce sales growth to more than double to at least 40%, putting e-commerce’s share of total retail sales in November and December at 39%.

holiday shopping figures for 2020 holiday season

(Image courtesy of CBRE Group, Inc. )

Consumer Behavior Shift on Purchasing “Tangible” Gifts

Due to travel restrictions, entertainment and restaurant venue closures, and social distancing rules, consumers this holiday season will be opting more towards gifting tangible products rather than experiences or services.

A poll conducted by Coresight in September showed that nearly 70% of respondents (68.9% to be exact) said they are shifting some of their spending from services to retail products because of the Covid-19 effects. Coresight also shows that during the 2019 holiday season, consumers spent about 12% of their holiday budget on “service” and “experience” gifts – totaling about $450 billion. Due to this shift, a large portion of the $450 billion spent on “service” or “experience” gifts in 2019 may be spent on physical gifts – which require shipping and distribution.


What This All Means for Pallet Companies

Increase in Pallet Demand

With the increase in holiday shopping this year looking to reach unprecedented levels, an increase in pallet demand will follow naturally.

“Pallets Move The World” is a term that has been repeated countless times in the pallet industry. Products cannot move from a distribution center to store shelves, or from a manufacturer’s facility to an Amazon fulfillment center without pallets. Retailers this holiday season will need pallets to meet the increase in demand, and they will need them fast.

 

More Rush Orders

Because we are heading into an unprecedented holiday season, pallet companies can expect more rush orders than before. This is due to retailers themselves facing unpredictable demand. The rise in omnichannel logistics nationwide may also lead to an increase in rush orders as manufacturers and retailers face this unpredictability from multiple (and in some cases brand new) channels.

This will be a challenge for certain pallet companies as some are simply not able to quickly pull resources to meet sudden increases in demand.

 

Overall Increase of New Business

With retailers facing unprecedented sales volumes, and pallet companies facing an increase in demand, retailers and manufacturers have already begun vetting new suppliers as a preventative measure. Depending on how the situation pans out during the early weeks of the holiday season, this vetting process may turn from retailers looking for secondary or tertiary suppliers to “Help! Our supplier cannot meet our new rush order, and we need to get our products out FAST!”

This increase in new business will be a challenge for some pallet companies as there needs to be the balance of meeting current customer expectations and taking on a rush of new business.


Why a Strong Pallet Company is Important

When looking at the recording setting holiday season retailers are projected to experience, having a strong pallet company in your corner that can meet your rush orders and increases in demand is extremely important. After all, products cannot move without pallets.

Indicators of a Strong Pallet Company

Below are the top 5 traits that all retailers should aim to find in their pallet suppliers.

1 – Resources & Flexibility 

In order to meet sudden increases in demand that are almost guaranteed this holiday season, a strong pallet company will have a vast amount of resources to pull from. These resources may fall under new lumber, labor and staff, or recycled pallets. Currently, there are parts of the country that are going through shortages of certain grades of GMA pallets – which makes working with a strong pallet company that can ship and pull resources from various parts of the country more important than ever.

2 – Knowledge & Experience

There are times when a pallet company will face a challenge that cannot be solved by any machine or amount of resources – but rather but what is in the minds of the employees. A strong pallet company will have a diverse staff that is knowledgeable and experienced to face any challenge. At Kamps, our team of operations experts, engineering, and sales experts work together to build solutions to your holiday season shipping challenges.


Example: There may be a time when you are facing a situation where it is absolutely impossible to manufacture or source the pallet your organization needs to ship products. Our team of experts can work together to either source a comparable substitute pallet or design and manufacture a substitute pallet from the ground up that will get the job done.

3 – Data Collection & Reporting

Working with a pallet company that places a priority on data collection and reporting is important because it puts your mind at ease that orders will be delivered on-time and in the quantity needed.

4 – Customer Service Oriented

A customer service oriented pallet company is important during the holiday season because it ensures that your expectations will be met – no matter what. During challenging times certain organizations may opt to have customer service take a backseat to operations and simply focus on just meeting orders. Other organizations may be enticed by the new potential business coming their way (as previously mentioned) that current customer expectations take a slight backseat to new customers. A strong pallet company will focus on their current customers first and foremost – ensuring that they are receiving the best experience possible, at all times.

5 – Nationwide Support / Multiple Locations

Both major and small retailers will benefit this holiday season from working with pallet suppliers that provide national support. Those large retailers that need support for 50 or more locations in their distribution channel will find many benefits in working with one company for all locations. These benefits include: one point of contact, comprehensive coverage, synergy amongst locations working together to service your business. Smaller retailers with only a couple of locations in their channels will also find benefit as the more locations a pallet company has, the more access it has to resources to service your locations.

Takeaway: Kamps Pallets is your answer this Holiday Season

At Kamps Pallets, we pride ourselves on being a strong pallet company that embodies all of these indicators, and more.

Our Kamps National Network of over 100+ locations provides the resources and flexibility you need this holiday season. Our knowledgeable and experienced staff provide unparalleled innovative solutions to some of your toughest challenges – while our customer service oriented philosophy and data focused approach gives your organization peace of mind knowing that you are receiving the best possible support and insights.

We are your platform for customer service, and we are your answer this holiday season.

 

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Fuad Hasanovic

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