Managing the Demands of a Shorter Holiday Season
The 2014 holiday shopping season is nearly upon us, and like last year, it’s a short one. The traditional high-traffic shopping period between Black Friday and Christmas is only 26 days this year – last year it was 25 days, and back in 2012 shoppers had a whopping 31 days to get through their lists.
The reduction of a few days may not sound like a big deal, but the crunch it puts on retailers and shippers is noticeable. Workers in these industries put a huge amount of prep into making the holidays successful, prep that begins many months in advance and produces an intensity that continues through the new year.
A certain amount of unpredictability is normal in any holiday season - challenges related to inclement weather and unexpected popularity for some items, for example, can’t be avoided. Dealing with a shorter shopping season magnifies these challenges, forcing retailers and suppliers to focus not only on prep, but also on effective and agile execution for the duration of the shopping period.
Let’s take a look at how the 2014 season has evolved from last year. In 2013, the truncated shopping period produced some supply and delivery issues that nobody wants repeated. In an attempt to alleviate that strain, and thanks to a stronger economy that indicates increased sales this year, many stores have announced longer hours, extended and early Black Friday deals, and bumped-up seasonal hires. A Careerbuilder survey suggests that 43 percent of retailers expect to hire seasonal workers to cover the holidays this year, up from 39 percent last year. Those in the shipping industry are seeing holiday employment bumps as well. UPS, for one, expects to bring on 95,000 seasonal employees this year, nearly twice last year’s levels.
More than Just Prep
Preparation is important, but it doesn’t make retailers immune to the inevitable variability and hurdles that a short holiday shopping season presents. To effectively cope with the stresses of this busy time, retailers need to ensure that they’re ready and able to adapt to changing circumstances as they happen. A big part of this is being flexible with how they fulfill orders. In years past, the distribution center was the heart of a retailer’s network and the hub for all inventory fulfillment. Today, fulfillment is performed in a variety of ways. Orders can be shipped from store or even sent directly from vendors to customers.
This is especially important during shorter shopping seasons, when consumers are likely to be more demanding than ever in regards to inventory availability and delivery. If one store is out of a popular product, for example, the ability to ship that product to a store from another location, or directly to the consumer’s home, will help companies improve convenience for customers, save sales and likely gain customer loyalty. Unfortunately there’s no retail crystal ball that predicts which products will be popular where. It’s a retailer’s job to connect existing supply with consumer demand, wherever it occurs, in as profitable a way possible.
Behind the Scenes Visibility
Obtaining insight into shipping and transportation systems is another important part of managing periods of peak demand. This holds true during any holiday season, but especially during the shortened ones.
The shipping industry isn’t always customer-facing, but like retailers, transportation and shipping organizations must also be flexible and adapt to the massive shifts in shipping volumes that arise during the holidays. To effectively do this, managers need tools that deliver instant notifications of delays, changes or events as well as the ability to re-route resources in real-time, no matter the complexities involved.
Retailers and shippers make a significant portion of their profits during the holidays, and a shorter than usual shopping season compounds the pressure to meet revenue expectations. To achieve success, retailers must have an agile approach to inventory fulfillment, as well as transportation management. There’s no telling what obstacles will develop during the holidays, but if retailers and shippers stay flexible, they will have the tools to conquer whatever is thrown their way.