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Gregg Zegras, executive VP and president of global e-commerce at Pitney Bowes, joins Yahoo Finance Live the state of online shopping heading into the holiday season.
JULIE HYMAN: That was retail specifically. Let's talk about retail more broadly going into what traditionally has been the busiest time of the holiday shopping season but maybe not as much this year. Greg Zegras is joining us now, and he is Executive Vice President and President of Global E-commerce at Pitney Bowes. And, Greg, when I talk about sort of the flow of what the shopping season is going to look like this time, I mean, from the research that you guys have been doing, how many people have done a lot of their shopping already?
GREG ZEGRAS: Yes, and good morning to you guys. Great to be here. Yeah, I think you've heard-- we've heard a lot about flattening the curve this year in the pandemic related to the virus. You've heard similar phrases in the retail sector at large. I think that was in response to what we started to see in the spring. We referred to that as the spring peak as consumers started to shop more online. Created a lot of demand inside of these e-commerce logistics services.
And as we got closer to the fall, you saw a lot of retailers taking efforts to try to bring their promotions forward. Obviously Amazon ran their Prime Day much earlier than they had in the past. You saw other large retailers try to do the same thing. That was an effort to flatten the demand curve for the holiday shopping season.
Our research, however, is indicating that no matter how hard they have tried, a lot of the shopping is still in front of us. 66% of consumers that we are studying through our BOXpoll survey are still planning on shopping as they get into Black Friday and Cyber Monday and obviously up until-- you know, up until the Christmas holiday. So we have a lot more here to come, and I think flattening the curve has been a bit of a challenge for the industry, who has really taught the consumer to expect these promotional windows, and it's really hard to change that behavior.
BRIAN SOZZI: Greg, I'm hearing from a lot of the-- when I talk to these retail executives, they have started to close stores again because of new mobility restrictions, depending on the state. How does that impact your business?
GREG ZEGRAS: Yeah, so again, we've seen this before. We've seen these store closings. Frankly, it's what's been driving a lot of the consumer shift to online. We expect that to continue, even if the stores are going to remain open. We were seeing indications in our research the consumer has really, really adapted to shopping online. More than half that used to shop through-- you know, through traditional channels, including at the store, are now shopping online. They're doing a lot of brand surfing. There's a lot of-- there's a lot of exploration going online.
And so I think as we've kind of gotten into this second wave, I think the consumer is going to continue to do what we've seen over the last four or five months, and I think they're going to shop more than ever online as we get through holiday.
MYLES UDLAND: Greg, I'm curious about-- and you mentioned flattening the demand curve. I'm curious if retailers are going to have a real problem next year with inventory levels because what retailers learned-- and we talked about this with an analyst earlier this week-- is after the crisis, you had to get rid of-- you were sitting on all kinds of stock you didn't want. This time around, people can't keep things in stock.
What sort of environment does that set up for in 2021? Is it inflationary? Is it still kind of supply constrained the way it's been the last few months?
GREG ZEGRAS: Yeah, I think it's a really good and important question, and I think this is one that, you know, retailers are going to have to find out and through their supply chain how to deal with that.
I think what we've seen by example is their ability to forecast, even for a provider like us, has kind of been in a 20% plus or minus, and that makes it very difficult for us as a supplier but also for them in their supply chain in predicting the demand. Again, as the behavior has shifted online, they're dealing with a new norm. They don't have the traditional benchmarks to go by, and that's creating pressure up and down their supply chain in terms of the way that they are going out and looking to acquire and procure goods for next season.
So, Myles, I think you're spot on. I think that one's still playing out, and I think we're all going to keep an eye on this industry.
JULIE HYMAN: Greg, let's also talk about logistics of getting this stuff to you. I'm seeing reports this morning that UPS and FedEx are experiencing van shortages, and they've also been calling for additional employees, even now at this late date, to help them during the holiday season. What is the holiday season going to look like, both for those companies but in terms of people getting the stuff that they want in the time that they want it?
GREG ZEGRAS: Yeah, I think the entire industry is dealing with this right now, and I think that's why you've seen efforts, again, to try to flatten the curve. You've seen retailers have to move up their, quote, unquote, "cut dates" for online ordering and shopping. That has been forced by the large providers. Pitney Bowes has set a cutoff date for our partners as well.
The key message I would say is consumers should shop early. No one wants to disappoint, you know, little Jill or John with their Christmas gifts. The earlier they shop, the better. It will allow all of us to find a way to get those trucks moving and to get those packages delivered. But it is going to be an unprecedented next three or four weeks. There's just more demand and not enough supply out there right now, and it's going to be a challenge if you don't get those orders in early.
JULIE HYMAN: And just real quick, what's early, Greg? Now?
GREG ZEGRAS: Now. My recommendation, if you-- you know, I would say, you know, as we get into Black Friday and Cyber Monday-- and, frankly, we should just call it cyber holiday at this point because I think that's going to be the theme here. Get your shopping done as soon as you possibly can. Don't get too close to the middle of December.
It doesn't mean if you order in the middle of December, it won't arrive. You're just taking more and more risk as the closer you get to the middle of December.
JULIE HYMAN: OK, word to the wise. Greg Zegras, thank you so much for being here and talking to us about this. You're the president of global e-commerce at Pitney Bowes. Appreciate your time this morning.
GREG ZEGRAS: Thank you, guys.