A Deep Dive into Market Outlook for the Quarter Beginning Oct 2021

Market outlook for retailers, 3PL service providers and D2C brands for Oct-Dec 2021

Summary

  • With the holiday season approaching with festival occasions like Dussehra, Diwali, Halloween and Christmas, this period looks really golden.
  • The pandemic has given rise to new consumer behavior patterns which need to be understood. Strategy and tactics have to be adjusted accordingly.
  • Retailers, 3PL Service Providers and D2C Brands that have newly entered the ECommerce space should focus on making the purchase and post purchase experience one of the best.

Let’s Begin:

We have moved on to the October quarter of 2021. We are getting to terms with the pandemic. We have survived an era of lockdowns and are coming to grips with vaccinations and waves of attacks from the virus.

Logibee’s research into the market outlook for the quarter beginning October has revealed that there are superb opportunities waiting to be utilized. But also, there are challenges to be overcome. Here’s a glimpse into what we learnt.

How is the Consumer Outlook for the quarter beginning Oct 2021?

Upcoming festive season seems delightful!

The holiday season has started in India with Dussehra kicking off and Diwali in the offing. These are two biggest consumer purchase seasons. Also, Halloween season at the end of October and Christmas purchases are around the corner across the globe. Potential wise, this is the best time of the year for the Retail, 3PL and D2C Brands. Let’s look at some expectations for the market

Some Consumer Behavior trends for the quarter beginning October 2021

Research is suggesting that spending patterns will be more reflective of 2019. However a few changes in the consumer psychology are definitely noteworthy:

  • People who have tried online purchases for the first time and have had a good experience are likely to continue this trend, even when offline life returns to pre pandemic normal.
  • 88% of high performing retail brands are investing in more digital experiences. Which means that creating a good online as well as post purchase experience is no longer an option. It is a must.
  • People buy themselves gifts for accomplishing something. Like getting a job during the pandemic or surviving and coping with the different aspects of the pandemic, etc.,
  • People often tend to buy gifts for family and friends to make up for the fact that they couldn’t always be there for them because of the pandemic.

So, there is enough reason to believe that this will be a golden quarter. However, what remains to be seen is how retailers, 3PL players and D2C brands would leverage this period to create wealth for themselves.

However what remains to be seen is how each of these sectors are going to capitalize on this season to carve a niche for themselves and get a share of the pie

Market Outlook for Retail in the quarter beginning October

The pandemic has made more retailers come online and experiment with online order and delivery models. Research says that, for the same period in 2020, retailers with creative pickup options like curbside, in-store, drive-through, etc., had 60% more growth than those that didn’t have these options, especially in the last five days before christmas.

In the list of evaluation criteria that consumers use to see if their online experience has been good or bad, one that matters a lot is the delivery. If customers are ordering online, here’s what they expect from you, from the perspective of delivery:

  • Customers expect faster, Inexpensive deliveries. Research suggests that about 55% of consumers would switch brands if there is free shipping or a lower delivery charge for faster shipping.
  • From the minute they place the order, customers would want to track the whereabouts of their parcel. Complete visibility throughout the delivery journey enhances the customer experience and allows to build trust and loyalty.
  • Real time communication with the customers using multiple channels such as Email, SMS and In App notifications helps in creating a good online experience. It makes them feel that you are reliable. At the same time in case of a delay or an early delivery, you can ensure customers presence and avoid delivery failure risk.
Logistics

Market Outlook for 3PL in the quarter beginning October 2021

With the boom of ECommerce, Consumers willing to spend time and money in online purchases and the success of some of the early entrants into the ECommerce space, retailers and D2C brands have tasted blood.

They are now planning more Supply Chain Investments in 2021. Research shows that Order fulfilment (e.g., last-mile delivery and curbside pickup) will see the heaviest investments, followed by warehouse management and procurement.

This is a great time for you, if you are in the 3rd Party Logistics space. Many retailers and D2C brands would think that having and managing their own fleet is not possible in the short run. So, either to try how this works initially or to immediately cater to pent up consumer demand they are likely to partner with you. Here’s what your customers will expect from you:

  • Support for same day deliveries or atleast faster delivery times compared to that of their competitors.
  • Complete visibility and control over the delivery journey. Since their customers demand visibility, when they outsource deliveries to you, they would expect to have complete visibility.
  • Lowest delivery failure rates and real time response for delivery failure risks. With a lot of emphasis on meeting customer expectations and post purchase experience, retailers and D2C brands would expect you to minimize or even eliminate delivery failure risk. In case of a failure, they expect detailed information that allows them to communicate with their customers and resolve any issues thereof.
Retailer

Market Outlook for D2C Brands in the quarter beginning Oct 2021

Research suggests that globally 52% of 25-34 year olds will buy directly from international online brands. This number can go upto 63% in India and Africa. With the festive season in the offing, it is likely that your D2C brands will see greater traction provided you get your act together and do some smart marketing. For instance, consider the following two facts unearthed by consumer research::

  • 48% customers will add more items to the cart, if they become eligible for free shipping.
  • 90% increase in orders is possible, if you include a free shipping threshold

The key here is that you will have to absorb the cost of free shipping. If the order ticket size increases, then you can absorb the cost and still make profits. As pointed out earlier, customers expect free or very minimal cost shipping!

Further if you have your own fleet, it would make sense to use your brand on the fleet and on packaging. Helps local marketing.

D2C Brands

Conclusion:

The festive season in this quarter combined with people wanting to buy stuff for their family and friends is beginning to look better than in 2021. But Retailers, 3PL Service Providers and D2C Brands have to build their muscle in delivery operations to take full advantage of the situation.

References