The reality is that holiday shopping doesn’t just strain consumers’ wallets—it amplifies pressure on every component of the supply chain. Even with Bain & Company forecasting a below-average 4.0% growth in US retail sales this holiday, the peak season will still test supply chain operations. Retailers must navigate port congestion, labor shortages, tariffs, and global freight disruptions while meeting increasingly high consumer expectations. With this in mind, let’s explore what this year’s holiday peak season has in store and, more importantly, how retailers can prepare.
The Surge: Holiday Retail Sales Projections and Demand Spikes
Bain’s survey found shoppers plan to spend more in stores this year, with in-store sales expected to rise 2.75%. Clothing, general merchandise, and health and personal care are set to post the strongest gains, while categories like electronics, appliances, building materials, and furniture are expected to decline.
Though online and mail-order growth has slowed to 7%—down from 10% in previous years—nonstore sales will still account for half of this year’s market growth. The implication is clear: retailers must prepare for earlier and larger inventory builds, while fulfillment centers face sustained waves of online orders demanding greater speed and agility.
Balancing inventory levels, workforce capacity, and carrier availability becomes critical as retailers work to avoid stockouts, delayed shipments, and overwhelmed distribution nodes during the season’s busiest weeks—all while meeting ever-intensifying consumer expectations for speed and reliability.
Consumer Expectations and Behavior
To date, shoppers’ priorities have typically centered on lower pricing and hefty discounts, but this year marks a significant shift. New data from Radial shows that 66% of holiday shoppers would forego a discount in exchange for guaranteed delivery.
“This holiday peak season, consumers aren’t just buying products, they’re buying confidence,” said Tom Schmitt, CEO of Radial. “Brands and retailers who stand out this season will be the ones who can scale quickly, fulfill and deliver with reliability, and eliminate friction at every step of the click to delivery experience. Meeting demands around speed, transparency, and responsiveness isn’t a nice-to-have anymore; it’s the foundation for long-term loyalty.”
The numbers underscore this urgency: the percentage of shoppers expecting 2–3-day delivery increased from 19% in 2023 to 30% in 2025. For retailers, this means delivery speed and reliability are no longer differentiators—they’re baseline requirements for staying competitive during peak season.
How Leading Retailers Are Rising to the Challenge
Forward-thinking retailers are transforming their supply chain models to meet the new delivery imperative. Target has expanded next-day delivery to 35 states by converting stores into mini fulfillment centers—a strategic move that puts inventory closer to customers. “Speed matters more than ever to consumers, so we’ve prioritized expanding faster delivery across the country,” said Gretchen McCarthy, Target’s Executive Vice President and Chief Supply Chain & Logistics Officer. “Having stores serve as mini fulfillment centers—the core of our stores-as-hubs model—gives us the ability to choose the fulfillment method that works best locally.”
Beyond speed, smart retailers are embracing comprehensive omnichannel fulfillment strategies that give customers true flexibility: buy online and pick up in-store (BOPIS), curbside pickup, ship-from-store, and seamless cross-channel returns. This approach does more than convenience customers—it fundamentally strengthens supply chain resilience. By diversifying fulfillment options, retailers ease pressure on last-mile networks, move inventory more efficiently across their entire network, shorten delivery distances, and maintain stock availability where and when it matters most. The result? Faster delivery, lower costs, and the seamless experiences that drive customer loyalty.
Bottlenecks and Pain Points Along the Supply Chain
According to Wells Fargo Supply Chain Finance data, constraints are hitting every stage of the supply chain heading into peak season.
Upstream: Tariff uncertainty pushed companies to import early—a defensive move meant to mitigate risk that has now front-loaded seasonal inventory and increased the likelihood of either stockouts or excess inventory, particularly in categories like apparel and décor with compressed selling windows.
Midstream: Retailers are balancing higher tariffs and shipping costs against minimal year-over-year inventory growth, creating vulnerability to shortfalls if demand shifts unexpectedly. Agile warehousing and real-time inventory adjustments are essential to avoid both costly overstock and damaging supply gaps.
Final mile: Capacity constraints meet surging e-commerce demand at the worst possible time. While 66% of shoppers plan to start holiday shopping early to avoid delays, last-mile operations can still be overwhelmed during peak periods—especially as many retailers face staffing freezes or tighter budgets that limit surge capacity.
Perennial Holiday Challenges
These 2025-specific pressures layer on top of the supply chain challenges that strike every holiday season:
- Communication breakdowns across partners
- Last-mile delivery bottlenecks
- Reverse logistics delays
- Limited real-time visibility
- Customs delays and complications
- Weather disruptions
- System overloads from volume spikes
The retailers best positioned to navigate this complex environment are those with agile supply chains, diversified sourcing strategies, and technology infrastructure that enables real-time visibility and rapid response to disruptions.
Building Supply Chain Resilience for Peak Season and Beyond
So what does an agile, resilient supply chain actually look like in practice? It starts with the right technology foundation.
Real-time visibility is non-negotiable. Retailers need complete transparency into inventory levels across warehouses, stores, and in-transit shipments. Without it, you’re flying blind—unable to redirect stock where it’s needed or identify potential shortages before they become stockouts.
Flexible fulfillment capabilities allow you to shift strategies on the fly. Whether that means routing orders from stores instead of distribution centers, enabling buy-online-pick-up-in-store (BOPIS), or adjusting shipping methods based on capacity and cost, flexibility turns potential bottlenecks into manageable challenges.
Predictive analytics and demand forecasting help you stay ahead of shifts in consumer behavior. The ability to anticipate demand spikes, identify trending products early, and adjust inventory allocation accordingly can mean the difference between capturing sales and disappointing customers.
Automated workflows reduce the manual touchpoints that slow operations during peak periods. From order processing to inventory replenishment, automation ensures your team can handle volume surges without sacrificing accuracy or speed.
Integrated systems that connect your warehouse management system (WMS), order management, transportation management, and e-commerce platforms create a unified operation where information flows seamlessly and decisions can be made quickly based on complete, accurate data.
The retailers who thrive during peak season aren’t just reacting to challenges—they’ve built supply chain infrastructure that anticipates them. As we head into the 2025 holiday season, the question isn’t whether disruptions will occur, but whether your systems and strategies are robust enough to handle them. Made4net is here to help.
