Our Commercial Director, Caroline Ellis, offers advice on how to get retail supply chains ready for the busy Black Friday and Christmas peak shopping seasons.
1. Consolidate and rationalise
A study of storage and fulfilment is one of the very few good things to emerge out of the cost of living issue. Retailers are increasingly focusing their attention on these two areas to identify supply chain efficiency. Just over a third (35%) of shops, according to our study from the previous year, had increased to half (50%) this year. In 2022, warehousing received 50% of the attention; this year, it received 57%. Focusing on these areas can result in long-term savings and lay the groundwork for removing mistakes and inefficiencies that might otherwise seriously hinder performance during hectic trade periods and surges in demand.
Consolidation and rationalisation are given a lot of attention throughout incoming and outbound logistics. To speed up the process of getting items into their warehouses, retailers are working to standardise procedures among numerous suppliers. By lowering the number of touchpoints, eliminating labelling and packaging errors, and lowering vehicle movements and mileage, this can optimise storage, handling, and distribution processes. These kinds of efficiencies are a necessary component of a well-functioning nominated carrier scheme and can assist in building flexibility and capacity for better peak handling.
2. Audit your accuracy
Supply chain buzzwords include transparency and visibility. Accurate stock tracking is essential for effective inventory management, as well as for maximising sales opportunities and stock value. Even though this is well acknowledged, errors can frequently undermine the establishment of end-to-end visibility and complete transparency of supply chain performance.
A supply chain’s issues, such as the precise information about inventory levels and locations, will be hidden by inaccurate data. This worsens during periods of increased demand since orders are processed and placed more quickly. In order to guarantee that the visibility they are using to inform their strategic decisions is giving a clear and accurate view of their stock inventory management, retailers are best placed to evaluate the correctness of their supply chains prior to peak.
3. Don’t delay your decisions
Uncertainty has been the only thing that has been definite in recent years. Retail supply chains are now dealing with increasingly unpredictable sales due to a variety of delays and disruptions, shifting consumer confidence levels, and challenging economic conditions. Retailers are experimenting and diversifying in response.
According to our data, retailers are boosting their product lines, sales channels, spending more on discounts and promotions, and giving customers more payment alternatives in an effort to capture those increasingly competitive sales. Retailers will revisit these strategies as they try to engage customers at peak times, and we advise businesses to be firm and decide as soon as possible. Then, in plenty of time for modifications, supply chain and stock inventory management tactics can be adjusted.
4. Have a plan A, B and C
Consumer confidence increased by five points in August, according to GfK’s Consumer Confidence Index, signalling a calm optimism among consumers and possibly better prospects for merchants as we move into the autumn. This might open the door for a large Black Friday and Christmas peak, which are traditionally times when consumers want to celebrate and are more likely to disregard caution when it comes to pampering themselves and spending money on presents for loved ones.
For retailers preparing for peak, such circumstances constitute a good plan A, but this must be supported by contingencies. Consumers are continuing to make savings and modifying their purchasing patterns and budgets accordingly. Retailers should use supply chain data to build models and create scenarios so they can know when to change selling prices and promotions during the busy, fast-moving peak. In what is sure to be a price-sensitive, value-driven peak, the ability to react fast could make the difference between keeping ahead of rivals.
5. Don’t forget, peak doesn’t finish before Christmas
While the Black Friday and pre-Christmas selling periods are often the emphasis of the peak season, it should also include the after-Christmas returns period, which represents a second wave of sales opportunities that businesses must be prepared for.
An increase in returns following the festivities indicates dissatisfied sales. Retailers can benefit from the re-shopping trend by making returns quick, simple, and affordable (ideally free for customers) and by processing reimbursements quickly. Consumers will continue be looking to replace the things they’ve returned. The majority of the time, this strategy can persuade a customer to stick with the retailer they’re returning an item to rather than choosing to switch and shop somewhere else.
Retailers must make sure that returns are treated as a separate channel. This will facilitate the efficient processing and resale of returned inventory and ensure that consumer expectations regarding return status and refunds can be handled. Data will also move more freely throughout supply chains as a result.
Contact us here for additional details on priming retail supply chains for peak.