Black Friday may be over, but retailers still need to take action to ensure their supply chains support holiday demand.
Chain store age recently spoke with Keith Jelinek, Managing Director of Retail Practices at Berkeley Research Group (BRG), about the importance for retailers to continue to monitor, analyze and adjust their supply chain operations throughout of the holiday season.
How big of an overall threat is supply chain disruption to retailer performance during the holidays?
For most retailers, supply chain disruption has a somewhat limited impact on overall vacation performance. Retailers have compromised in the past 90-120 days, with promotional discounts limited on products in short supply, thus increasing margins.
We have to consider the holidays combining October-December. Many holiday sales have been driven forward by consumers keen to get off to a good start. Black Friday weekend sales were not a landslide, but we have three very strong weeks ahead of us. January will also be interesting, as many retailers have reported strong sales of gift cards, which will bring shoppers to stores after the holidays.
What mitigating actions can retailers take on the inbound inventory side?
There will be scattered shipments of holiday and winter clothing that will always arrive on time to be available in stores or online. The only mitigation measure retailers need to be aware of is the onslaught of holiday and winter products that will reverberate after the holidays.
Questions for retailers to consider: will the product be available at significant discounts, can any of the products be packaged and kept until next year, and what is the impact on liquidity ? Money is king.
What kind of omnichannel capabilities should retailers have in place?
If you don’t have efficient processes and systems to support Online Purchase-In-Store Pickup (BOPIS), Store Shipping, or Curbside Delivery, you’d better quickly review and do the appropriate investments. All three of these omnichannel capabilities require precision when it comes to the accuracy of inventory on hand, so make sure you don’t overlook them.
The way in-store inventory may have been managed in the past is unlikely to work in the future. You will need end-to-end process retooling.
How can traders prepare their stores to stay in stock despite delays?
They need to focus on great customer service. Train employees to deal with disappointed and angry customers, offer to have it shipped from the fulfillment center or other store if available. Offer pre-orders, if you know the product is coming after the holidays, offer to sell it to them now and ship it when they arrive (again, you need to make sure that inventory accuracy is not overlooked. ).
Pay attention over the next few weeks to the amounts allocated to stores versus kept online in the distribution center. Once the product is in stores, it is difficult and expensive to return it. Finally, be sure to take a visual perspective: group products on shelves, remove empty circular shelves and displays that give the impression of a “close deal” sale.
How do you see the performance of the supply chain in the first half of 2022?
Many factors started to materialize over 20 months ago. These include how the resumption of production was delayed, stocks were liquidated from the supply chain in early 2020. Other factors include a lack of stocks of shipping containers and chassis and worker relocation and preference changes forcing labor shortages and higher wages. We are unlikely to see any semblance of “normal” until the second half of 2022.