Demand volatility and consumer behaviour redefine high season

Retailers are adapting to shifting consumer behaviours, from compressed promotional calendars and AI-driven personalisation to growing demand for healthier food options. This requires more agile inventory strategies, stronger supply chain visibility and greater flexibility across fulfilment and sourcing networks.

Summer sales events are creating a new retail demand surge

What started as Amazon Prime Day has evolved into a multi-retailer battle for consumer spending. This year's shift of Prime Day into late June, along with competing promotions from Target, Walmart and other retailers, created a concentrated demand surge across the retail supply chain.

What's going on

• Amazon moved Prime Day from its traditional July timeframe into late June, pulling freight and promotional activity forward.
• Target and Walmart launched competing sales events during the same period, with Walmart extending its promotion beyond Amazon's event. Nordstrom’s, Macy’s and Ulta also launched targeted promotions to capitalise on the heightened consumer activity.
• Despite widespread promotions, early results suggest consumers remain value conscious, spending more on everyday essentials (e.g., trash bags, cat food, makeup remover) and less on discretionary purchases.
• During major promotional events, order volumes can reach five to 10 times normal levels, creating significant fulfilment and transportation demands.

Why it matters

Retailers are increasingly competing for a limited pool of consumer spending by concentrating promotions into shorter periods. While the strategy can boost traffic and sales, it also creates significant strain on inventory planning, fulfilment operations and transportation networks.

Looking ahead

The shift toward earlier promotional events may alter traditional summer freight patterns. By pulling inventory positioning and promotional activity into June, retailers are effectively moving some demand forward in the calendar. As the industry transitions into back-to-school and Q4 holiday inventory planning later this summer, supply chains will need to evolve with the changing seasonal freight flows.

As promotional events become larger and more synchronised, supply chain agility will become increasingly important since greater freight demand on the part of retailers and retail suppliers coincides with high season for produce and summer beverages. Retailers that position inventory effectively and maintain flexible fulfilment networks will be better prepared to manage demand spikes without sacrificing service levels.

AI is making retail personalisation the new standard

“If we have 4.5 million customers, we shouldn’t have one store. We should have 4.5 million shops,” Jeff Bezos said in 1998. This long-discussed vision is becoming a reality as retailers are increasingly using artificial intelligence to deliver individualised shopping experiences across digital and physical channels. As consumer expectations continue to rise, personalisation is becoming less of a competitive advantage and more of a requirement.

What's going on

• Consumers increasingly expect retailers to recognise them, remember them and anticipate their needs across websites, mobile apps, social media and shops.
• McKinsey reports that 71% of consumers expect personalised interactions, while 76% become frustrated when those expectations are not met.
• Leading retailers are using AI to analyse shopping patterns, improve recommendations and tailor customer experiences in real time.
• McKinsey also reports that leading personalisation programmes can generate up to 40% higher revenue while increasing customer satisfaction by 15-30%.

Why it matters

Personalisation is changing how inventory is positioned and how retailers fulfil orders. More accurate demand forecasts and inventory visibility can reduce inefficiencies while improving the customer experience.

Personalisation does not necessarily have to translate into more deliveries. Dense parcel networks, inventory pooling, fewer store replenishment legs and better inventory demand visibility can all contribute to fewer store-bound truckloads while still contributing to ecommerce and retail sales growth.

Looking ahead

As AI adoption accelerates, retailers will continue investing in technology that connects customer insights to inventory and fulfilment decisions. Companies that successfully align customer demand with supply chain execution will be best positioned to capture future growth.

Consumers continue moving away from ultra-processed foods

Consumer attitudes toward health and nutrition are reshaping food purchasing behaviour. Growing awareness of ultra-processed foods, combined with increasing policy attention, is creating new opportunities and challenges across the food and beverage industry.

Behind the numbers

• Americans still consume the majority of their calories from ultra-processed foods (53% for adults, 62% for children), but consumption has gradually declined over the past decade.
• Health professionals and policymakers are placing greater focus on the relationship between ultra-processed foods and chronic disease.
• California lawmakers have advanced legislation (AB 2244) that would establish a certification programme for foods that meet specific non-ultra-processed standards.
• Retailers and food manufacturers are responding to growing consumer demand for simpler ingredients and healthier product options.

Why it matters

Changing consumer preferences can shift demand across product categories, create new sourcing requirements and alter inventory needs throughout the food supply chain.

Looking ahead

Brands that adapt to evolving health and wellness trends may be better positioned for long-term growth. As manufacturers reformulate products with simpler and more recognisable ingredients, they may need to diversify supplier networks, improve ingredient traceability and manage greater sourcing variability tied to agricultural production and seasonality.

Greater visibility into supplier networks and ingredient flows will become increasingly important as demand for clean-label foods grows.

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