7 Retail Lessons Learned from Holiday 2020

7 Retail Lessons Learned- IMA

By Tompkins International

2020 was an unprecedented year for the retail industry, with COVID-19 amplifying existing challenges of rising e-commerce sales and store closures. The holiday season was no exception, serving as a tipping point that has forever changed the face of retail. Here are seven lessons learned from Holiday 2020 to help position retailers for future success.

The tipping point

While COVID-19 didn’t cause the capacity issues with increased e-commerce sales, it created a tipping point resulting in a major shift to online shopping. Even after the pandemic subsides, e-commerce will not return to what it was before and will continually change from the next normal to the next. Therefore, Holiday 2020 should be viewed as the beginning of the next normal to prepare for the future.


Prior to COVID-19, it was good practice to develop an optimal path forward, but this strategy was no longer adequate after Holiday 2020. Instead of a single path forward, retailers need to develop flexible solutions that can quickly pivot to meet changing requirements.

Distributed logistics

All customers want to receive products quickly and inexpensively. While it’s easy to achieve one, the only way to accomplish both is through a distributed logistics network of fulfillment centers located close to your customers.


As the labor shortage continues, fulfillment operations must move away from expensive, rigid automation to flexible, modular robotics solutions. These advanced robotics systems will reduce operating costs, increase agility and allow for scalability.

Demand shaping

Previously, the retail holiday season was a three-week period spanning from Thanksgiving to mid-December. In 2019, Alibaba’s Singles Day on November 11 offered retailers an opportunity to start their peak season earlier. Then in 2020, Amazon moved Prime Day to mid-October, prompting many retailers to start holiday sales in late September, resulting in a more manageable three-month peak. Moving forward, promotions should be used to control—not create—the peak.

Customer expectations

While customers continue to demand lower prices, more selection, added convenience and a more personalized experience, the “K-shape” has created a much more complex landscape for retailers. In retail, the K-shape illustrates a point of different customers taking different paths, such as apparel sales shifting from business attire to casual wear as more people began working from home during the pandemic. Therefore, retailers need to not only understand customer expectations, but also the impacts of different expectations for different customers.

Digital supply networks

Supply chains must move away from the traditional linear model to a digital, real-time, end-to-end network that provides all parties with a single version of the truth. Deploying a control tower solution that combines artificial intelligence and machine learning to deliver predictive and prescriptive analytics can also help reduce costs and inventory while achieving customer service excellence.

Retailers must embrace all seven lessons to prosper in the next normal. Developing a strategy including an efficient and effective response to each lesson will best position retailers for future success and long-term growth.

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