Demand Planning During a Pandemic: How Ecommerce Brands Can Plan for the Unexpected


Think back to the end of summer 2019. You were likely riding a typical wave of seasonal highs and lows along with most other retailers: a slow winter, a resurgent spring, a calm summer, and a booming holiday season. 

You never expected 2020. The global coronavirus pandemic impacted every aspect of retail, creating an unprecedented combination of effects. 

Overseas manufacturing paused, sea freight capacity was greatly reduced, fulfillment centers socially distanced, and the entire supply chain slowed down dramatically. Meanwhile, consumers began to stockpile essentials. Then, they weathered stay-at-home orders by taking to the internet in droves and shopping online for new essentials.

Employees were furloughed and legacy brands that have struggled to compete in a digital environment, like JCPenney and J.Crew, filed for bankruptcy. Brick-and-mortar stores closed their doors, leaving piles of seasonal inventory on shelves—inventory that had been planned for or purchased six to 12 months earlier. 

The coronavirus has made inventory management more complex than normal. When demand has fluctuated uncharacteristically and without predictable demand trends, how can brands plan their manufacturing and inventory levels appropriately—especially heading into the holiday shopping season? 

Navigating that question this year will be more important than ever since 2020 is projected to be the biggest year of online retail sales ever

There’s no magic eight ball, but with synthesized data from consumers and retail brands, here are three takeaways to help you navigate demand planning this holiday season. 

1 | Consumer demand by category mimics 2019 with some exceptions

At the onset of the pandemic in early March 2020, buyer behavior changed quickly thereafter. A new theme of products emerged—new essentials, which included products in the office supplies, health and fitness, beauty and cosmetics, housewares, home improvement, and toys and hobbies categories. Work from home mandates, stay-at-home orders, and general anxiety created a boom in these new essential categories. 

Here’s a look at how consumers were spending across these new essentials categories between March 23rd and April 2nd of this year.


Now that nearly half a year has passed and cities and stores have reopened, buyer sentiment is looking more similar to times pre-coronavirus, according to data Klaviyo collects for more than 30,000 brands. 

Researchers at Klaviyo pulled sales data from an equally distributed cohort of customers to see what consumers were buying last year during the holiday season. The categories with the largest percentage of sales last holiday season were apparel and accessories, health and beauty, home and garden, jewelry, and food and beverage.



So what do consumers’ holiday shopping plans look like so far? Nearly 1,000 people weighed in. 

When asked which product categories they planned to give as gifts for the holidays this year, the strongest demand was in apparel and accessories (52 percent), electronics (43 percent), toys and hobbies (40 percent), beauty and cosmetics (31 percent), and food and beverage (26 percent).

Although the coronavirus has thrown retail for a loop, consumer demand this holiday may not be so different from normal times based on Klaviyo’s data. 

Categories that performed well last holiday season and show strong buyer demand this holiday season are apparel and accessories, beauty and cosmetics, and food and beverage. 

Last year, home and garden made up the third-largest portion of overall sales, but consumers showed low intent to gift home and garden products this year. 

Last holiday season, electronics weren’t in the top five selling categories and, this year, they’re the third-highest category consumers intend to give. 

2 | Most consumers plan to spend the same or less this holiday season

More people than ever will be buying online this year, but we can’t ignore the impact of the coronavirus on the economy. 

The United States’ unemployment levels reached an all-time high of 14.7 percent in April 2020, according to the Bureau of Labor Statistics. 

So how might that impact holiday spending? 

According to consumers, forty-four percent say they’re planning to spend the same as last year this holiday season, 30 percent plan to spend less than last year, 11 percent plan to spend more than they spent last year, and 13 percent are undecided.

When asked how much they were planning to spend on individual gifts, 46 percent of consumers say they’re planning to spend the same as usual, 26 percent are planning to spend less than usual, 12 percent are planning to spend more than usual, and 14 percent are undecided. Fewer than 50 percent of respondents plan to spend the same and more than 25 percent are planning to spend less than last year.

While historic sales data will support those who plan to spend the same, be prepared to sell lower ticket items to consumers who plan on spending less than usual on individual gifts. 

3 | Brands are thinking creatively and pivoting appropriately 

To supplement this data, I spoke with ecommerce marketers who shared how they’re thinking about demand planning amid disrupted supply chains and uncertain consumer behavior. Each shared a different outlook and strategy based on their unique industry, supply chain, and market. Here are some of their suggestions.


Remove risk for customers 

The pandemic is far from over in many parts of the United States and countries that have had new cases under control are starting to see second spikes as restrictions lift, reports U.S. News

Anything could happen, but you can help to protect your brand against excess inventory and also protect customers from the downside of buying a gift that won’t be used because of the pandemic. 

Demand for certain retail items is highly dependent on public spaces being open. To tip the scales in customers’ favor and encourage them to purchase early, Curt Nichols, founder of Glade, an outdoor accessories retailer known primarily for premium ski gear, is offering customers Open Mountain Insurance. If ski resorts are closed due to the coronavirus, Glade’s promised to accept unused products and fully refund customers.

“We’re trying to get ahead of things and operate under the assumption that there’s a lot of uncertainty. There’s nothing we can do to change the ski season, but there are things we can do to try to get ahead of it,” said Curt Nichols. 

"We're trying to get ahead of things and operate under the assumption that there’s a lot of uncertainty."

Curt Nichols, founder, Glade

Without knowing what conditions will present themselves this holiday and into 2021, focusing on non-seasonal items is a smart bet. 

Core collections versus fashion collections will hold their shelf-life and retail value longer so you can avoid massive clearance sales of unsold fashion inventory. 

Gift cards allow the giftee flexibility to shop when conditions are more stable and help ensure gifts make it on time since shipping is expected to take longer than normal this year. 


Sell to your brand enthusiasts first

Now more than ever, it’s important to keep close communication with your current customers. 

Data from 2019 shows that 60 percent of purchases over Cyber Weekend were made by customers who engaged with a brand’s email prior to Q3. 

Start having those conversations and begin selling earlier to your followers, subscribers, and past customers, first. Since they’re already familiar with your brand or products and they may have a positive association with them, engaging them first will be a key way you can move inventory. 

Glade has succeeded by creating exclusivity around their limited inventory and remaining transparent with customers about the number of products left to sell. 

“Before stay-at-home orders, we were very fortunate that we were sold out of almost everything in the middle of February. It’s part of our demand planning to create exclusive products that are designed to sell out earlier than the end of the season,” said Curt Nichols.

"It's part of our demand planning to create exclusive products that are designed to sell out earlier than the end of the season."

Curt Nichols, founder, Glade

That strategy is guiding their communications and promotional strategy during the pandemic. They’ll be leaning into marketing an exclusive amount of inventory and incentivizing customers to buy earlier. 

“This holiday, we’re doing a very big pre-sale push. We’re telling our customers, ‘once again, we have a limited amount of inventory.’ We’re starting our holiday pre-sale in the beginning of September and doing an early bird pricing cadence, as well,” shared Curt Nichols. 

"This holiday, we’re doing a very big pre-sale push...We’re starting [it] in the beginning of September and doing an early bird pricing cadence, as well."

Curt Nichols, founder, Glade

Stay true to your product and customers 

With perceived changes in the way customers are living and buying, it can be tempting to want to pivot your product offering to meet the demand of what you think customers want. Even if you’re able to quickly produce a new product, consider whether that deviates from your brand’s promise to loyal customers. 

Laura Moffat, co-founder and director of marketing at Kirrin Finch, a menswear-inspired androgynous formalwear and clothing line, shared her thoughts on the growth in purchases of loungewear and sweatpants during the coronavirus. 

“We don’t have the bandwidth to just shift on a dime and, although we do have casual wear options like shorts and tees, they aren’t our best selling items. People can get those products from other places. They’re not looking to us for those items,” said Laura Moffat. 

“For us, the strategy is to stay true to our most popular selling categories pre-coronavirus, like our formalwear. People are having weddings—even if the weddings are smaller—and beginning to buy suits again. People are starting to go back to offices. We see our customers beginning to buy and we think people are fed up with wearing sweatpants. Having a massive shift in our business to suddenly offer completely different things doesn’t make sense for us or our customers,” she shared.

"For us, the strategy is to stay true to our most popular selling categories pre-coronavirus, like our formalwear... Having a massive shift in our business to suddenly offer completely different things doesn't make sense for us or our customers."

Laura Moffatt, co-founder and director of marketing, Kirrin Finch

Instead of shifting products to get in front of customers at the height of this pandemic, Kirrin Finch stayed close to their customers with authentic communication through email and social media. 

While knowing that customers weren’t going out, they shifted their content away from products and towards community activism and philanthropic efforts they were engaging with. As things have opened up, they’ve returned to selling more of the products they know their customers love to wear outside of their homes. 

Ultimately, it’s important to stay true to your products and give customers what they want from your brand. 

Final thoughts 

While demand planning feels like a task fraught with uncertainty this year, it may not be as daunting as you think. Consumers will be shopping this holiday. They’ll be spending money. So lean on sales data from previous years and plan to sell what your brand sells best. 

This year, what you plan to sell may not be as important as how and when you plan to sell it. Start early, cater to your loyalists, and communicate empathetically with your customers every step of the way. 

Wondering how the holiday marketing season might be different this year? See what three ecommerce marketers had to say.

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