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Is it too late to Ramp Up the Supply Chain for the Holiday Season?

September 14, 2017


“Christmas is coming, the geese are getting fat.” That opening line of a traditional Christmas carol is normally sung after Thanksgiving; however, for supply chain professionals it’s a warning they should hear months ahead of the holiday season. Each year holiday decorations and goods seem to hit store shelves earlier. It’s called Christmas creep and it means retailers must “fatten the geese” earlier every year. Several years ago John J. Boucher, President & CEO of ModusLink wrote, “With consumers procrastinating less, companies that want their products wrapped and ready for the holidays need to start earlier as well — even as early as 12 months ahead of time. In actuality, in a well-performing supply chain, when the consumer clicks buy, the product is already nearing the end of its journey. To do this successfully and not return an ‘out-of-stock’ message to consumer searches, a visible supply chain is necessary.”[1] This year’s holiday season will soon be upon us. Is it too late to ramp up your supply chain to make this holiday season a great time for sales? According to Boucher, right about now products should be making “their way to the warehouse where short-lead-time materials and region-specific items are purchased, while appropriate languages are added to the product — all based on forecasting and insight into regional demand. In addition, as early as possible, companies should work with their shipping partners to book available services and avoid last-minute budget-killers like having to airship product versus shipping by sea.” Waiting until the last minute to ramp up your supply chain can be risky. Hurricanes Harvey and Irma forced the closure of numerous ports and damaged other supply chain facilities. They are stark reminders about how quickly supply chains can be disrupted.


What Will this Holiday Bring?


Lara Ewen reports, “Retailers are gearing up for the holidays and hoping for a good end to the year. While 2016 holiday sales were up, they were only slightly so, with online sales coming out on top and in-store foot traffic showing a pronounced decline. According to Fung Global Retail & Technology, a retail think tank, that trend is expected to continue this year. Based on consumer feedback, Fung said 82% of its surveyed consumers expect to buy holiday gifts online this year, compared with 77% who anticipated buying gifts in physical stores.”[2] What that means for retailers is that this season could be a bust if they don’t already have a strong omnichannel strategy in place. According to the report, 22.7% of Americans indicate they plan on spending more this year than last year, 21.3% say are going to spend less than they did last year, with 49.7% claiming they are going to spend about the same. The big holiday question always is: What is going to be hot this year? Retailers who can answer that question early and correctly are the ones whose virtual and physical shelves will be filled with the right products. Cognitive computing platforms can help retailers predict what products will be hot; but, it’s too late this year to try and put a predictive analytics program in place for the holidays. It’s not too late to begin a predictive analytics project for the years ahead.


Cara Salpini () observes, “Retailers can rise or fall significantly based on their holiday performance — and knowing what customers are expecting, hoping for and trying to avoid at all costs can help put retailers on the right path for a successful season.”[3] Salpini combed through the National Retail Federation’s 2017 Retail Holiday Planning Playbook, and concluded there are “four things consumers want this holiday season” unrelated to actual products. They are:


1. More online wishlists. “With online shopping playing an increasingly important role in just about every holiday, more consumers are looking to build their wish lists online rather than on paper. According to the NRF, 63% of shoppers would like to use online wish lists to help organize their gift purchases, although only a quarter of respondents currently use online wish lists. That being said, 47% of respondents said they will look in physical stores to find the perfect gift and 44% will go straight to family and friends for gift ideas or hints.”


2. Transparent return policies and reviews. “Transparency is key for retailers heading into the holiday shopping season. Not only do customers want transparent and generous return policies, but many of them will be taking into consideration customer reviews (whether good or bad) before they buy a product. The NRF found that three fourths of the holiday shoppers surveyed checked return policies before making a purchase, while 22% backed out of a purchase because of a bad return policy.”


3. Personalized recommendations and purchase guides. “Over half of the survey’s respondents (54%) used a retailer’s recommendations when making their lists last year and that same percentage started researching for their holiday gifts in October. The big takeaway from these stats is that holiday shoppers want detailed product information and personalized customer service. The more expensive a product is, the more research customers want to conduct before committing to it. That said, the numbers are high across the board: 66% of shoppers do research for items that are less than $50, while 85% research for products between $50-$100 and 89% conduct research for items $100-$150, $150-$200 and anything over $200.”


4. Convenience. “Convenience, as ever, is the name of the game for retailers — especially during the holidays. Shoppers (many of whom are parents) are usually juggling their holiday shopping with their job, kids, housework and a social life. Making it easy for holiday shoppers to get their shopping done whenever they have time for it — whether that’s weeknights or weekends — can give retailers a huge boost during the season. Almost all (90%) of the NRF’s respondents admitted that some aspect of their experience convinced them to make purchases that they were otherwise hesitant about, with the majority (64%) citing free shipping as the catalyst for their purchase, while half cited limited-time sales or promotions and 33% named buy online, pickup in store capabilities.”


For retailers believing themselves behind the curve this holiday season, that list should encourage them. It’s not too late for retailers to influence consumers and offer them a convenient and pleasant shopping experience. A well-oiled supply chain is required to ensure convenience and other expectations are met. Products do matter, of course, but good content marketing can influence consumers to buy the products you have on hand.


Help Consumers with Good Information


According to the NRF’s Playbook, “The holiday season starts ahead of Black Friday, with more than half of holiday shoppers starting to research and plan their gifts in October or earlier — before they start committing to actual purchases.”[4] If you haven’t already bolstered the content on your website, do it now. The NRF Playbook notes, “Consumers may be entering the holidays armed with more information but that doesn’t mean their minds are completely made up. Nine in 10 holiday shoppers said something convinced them to make a purchase they may have been hesitant about; more than half purchased an item that was recommended to them by the retailer online.” In preparation for future holiday seasons, cognitive computing platforms can help retailers target consumers with the right message and help retailers understand regional product preferences.


Ayaz Nanji (@ayaznanji), co-founder of ICW Content, reports, “Retail marketers say developing content and promotions well ahead of time is the most effective thing that can be done to prepare for the winter holiday shopping season, according to recent research from Campaigner. The report was based on data from a survey of 100 retailers who are Campaigner clients. Some 62% of respondents say early development of marketing content and promotions is the most helpful approach for preparing for the holiday season.”[4] If you haven’t prepared, it may be too late. Nanji explains, “One-third of retailers who began planning before last September say they had a successful 2016 holiday season; only 22% of retailers who began planning in September or later say they had a successful 2016 holiday season.” As Boucher noted, planning for the holiday season should start right after the end of the last holiday season. Next year, don’t be a laggard when it comes to ramping up your supply chain.


[1] John J. Boucher, “Why You Should be Planning For the 2015 Holiday Season Now,” SupplyChainBrain, 9 February 2015.
[2] Lara Ewen, “Boom or bust? Holiday predictions are a mixed bag,” Retail Dive, 8 September 2017.
[3] Cara Salpini, “A retailer’s guide to the holiday season,” Retail Dive, 1 September 2017.
[4] Ayaz Nanji, “Winter Is Coming: What Retailers Can Do to Prepare for the Holidays,” MarketingProfs, 1 August 2017.

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