As 2020 comes to a close, many retailers and consumers alike are looking forward to next year. There’s still one more opportunity to close out the year on a positive note: the holidays! Before the pandemic, retailers had decades of accurate data to pull from to create more precise holiday forecasts. Obviously, this year has been a bit more challenging.
Gallup recently reported that consumers are less worried about the virus today than they were in mid-June. With the holidays approaching, many consumers have a strong desire to return to pre-COVID shopping patterns but still remain somewhat wary of how to safely do so.
At the same time, more consumers than ever are using alternative delivery methods and embracing technology to shop. There’s no sign of this trend slowing. Bluedot’s recent Holiday Habits survey reported “80% of consumers will increase their use of curbside pickup for gift purchases” and “75% of consumers plan to use mobile apps for at least half of their holiday shopping.”
Despite all of the mayhem this year, the good news is that consumers still want to buy! The challenge for retailers is not only how to deliver products, but what to deliver. With unpredictable supply and demand patterns leading up to the holidays, there are still things retailers can do to deliver the right shopping experience for their customers.
Have the Right Stock
One of the most important things retailers can do this holiday season is to ensure they are carrying the right products. This means eliminating extra SKUs where possible and limiting the breadth of product offerings. When the pandemic first hit, many companies suffered from SKU proliferation in that they had to add different forms of the same products to meet the needs of various market segments.
However, carrying extra inventory in the same product category or with very similar attributes may not be necessary as panic buying subsides. Retailers should make sure they continuously hone their inventory to provide the right type and number of products to fulfill online or BOPIS orders and in-store purchases, without carrying too many options.
In the next few weeks, retailers must analyze their existing inventory and evaluate which SKUs are most profitable and in demand. They then need to plan to have enough inventory on hand to meet holiday demand without over-ordering.
More importantly, retailers need to know what inventory to stock in each distribution center by knowing the true demand for each one. One mistake retailers often make is treating internet sales as just another store, instead of its own entity. True demand takes every selling channel into account, including brick and mortar and online, so that more accurate inventory orders can be placed. A lot of this starts with having a strong supply chain management strategy with solid vendors in place.
“Carrying extra inventory in the same product category or with very similar attributes may not be necessary as panic buying subsides. “
Have the Right Suppliers
According to Coresight Research, about three-fourths of the top 50 store-based retailers in the United States offered curbside pickup by August of 2020. Nonetheless, selling online and offering curbside delivery can do little to counteract not having good suppliers and supply chain management strategies in place. Retailers should have multiple, reliable suppliers for various products when possible so they can always have an alternative channel for the most important SKUs.
Retailers should prepare for potential disruptions in the future with a backup vendor plan. A problem many retailers faced throughout the year was manufacturers and distribution centers running out of stock. Shifting supply and demand during the pandemic highlighted this. Throughout 2020, manufacturers had to switch their focus towards certain product categories, such as cleaning products and toilet paper, in order to keep up with increasing consumer demand.
The retail supply chain is still adapting to this new landscape in 2020, and relief may be further away than we had hoped. As a result, retailers should evaluate their existing suppliers and look to add additional vendors where appropriate.
Have the Right Partners
The holiday shopping season is on the horizon. Having the right partners in place will enable retail chains to focus more on meeting the needs of their customers instead of trying to figure out exactly which SKUs to carry. In order for retailers to have the right stock and find the right suppliers, they need the right analytics. The right answers can be obtained by partnering with solution providers, like 4R, which offers machine learning and an AI-powered suite of software to help retailers make better inventory and buying decisions while they sleep.
4R 4Retail
We are dedicated to helping retailers deliver the right way so they can thrive this holiday season and beyond. We offer a state of the art DC replenishment solution that can help stock the right level of inventory and improve collaboration with existing suppliers. With our SaaS model, there are no upfront software license fees, hardware hosting costs, or complex training required. All of our solutions can be implemented quickly without the need for additional hardware or IT resources.
Contact us today by calling (610) 644-1234 or emailing info@4rsystems.com to learn more about how 4R is 4Retail.