How Brands Can Keep Up with Earlier Holiday and Retail Seasons
No matter what time of year it is, when you enter your local grocery, pharmacy or big box store they will be selling merchandise for the next big holiday or retail season.Whether it’s back to school supplies in June, Christmas decorations in October, or Valentine’s – or even Easter eggs – on January 1, retailers are always looking ahead, sometimes by months, to the next big shopping event.
One of the most obvious reasons why retailers have made this shift is to increase sales. It’s understandable that brands want to ring every cash register possible, but the reality is that earlier timeframes have only a slight effect on overall demand, and this slight increase is narrowed further as people have more options for shopping and those options have faster shipping. Whereas consumers used to have to be in the toy store at the crack of dawn on Black Friday to score the hottest new toy, they can now order it online from their phone while watching Thanksgiving Day football games, or in some cases wait until late December, if they’re willing to pay a premium price.
While it’s tempting to assume that this shift is a result of retailers working to increase sales, it’s also important to consider the other factors at play.
Lengthening lead times
As demand for high tech products – and that means everything from your iPhone to your kid’s Hatchimal — has increased, supply chain lead times have lengthened. Because the majority of high tech consumer products are produced in and shipped from Asia, the amount of product available at a given time is often limited, and restocking can take some time. This has forced brands to prep for peak holiday and retail seasons earlier than ever – generally as soon as the last peak season wraps up – and often results in the ordering of extra inventory to ensure there is enough supply to meet the, eventually high, demand.
Managing e-commerce growth
As discussed in our blog post on planning for peak season, the growth of e-commerce has made supply chain planning more unpredictable than ever. When shopping was limited to brick and mortar stores, brands likely had a good idea of how much product they would sell during a particular peak period – however now that consumers have nearly limitless options when it comes to where to purchase a product, forecasting has become less reliable. To combat this, brands – especially those dealing in high tech products – have begun to stockpile inventory to prevent running out of product mid-season, which has created its own issues in the form of retailers scrambling to sell excess product once the holiday season is winding down. To avoid this, brands should instead use the myriad data sources available to them – everything from in-store and online analytics to IoT-connected warehouse systems – to find the right balance of inventory they need to have on hand.
Supply chains are constantly shifting, lengthening and shortening depending on the current industry trends and upcoming holidays. To keep up, brands need a partner they can trust to keep them well-stocked, well-informed and well-prepared. ModusLink’s end-to-end supply chain solutions can do just that.
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