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How Ready is Your Supply Chain this Christmas?

How Ready Is Your Supply Chain This Christmas Supply chain christmas readiness
How strong is your supply chain this holiday season

If retailer’s thought 2020’s supply chain woes during the pandemic were over: they’re mistaken. According to industry experts and analysts, the 2021 holiday season has just begun and suppliers and retailers are already facing delayed shipments and stratospheric freight prices.

Last year, retailers did make temporary adjustments to rapidly move their store online and consumers adapted. But both suppliers and retailers have not realized that online shopping has almost become a permanent consumer preference, and as the holiday season begins there is a lot of ecommerce activity. Combine this unpreparedness with worrisome weather conditions and high transportation costs, and we get a cascading effect on product availability and wait time.

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As per an ACG Global report, only 18% of organizations surveyed have adopted technology platforms to address their supply challenges since 2020. The same survey also revealed that 41% of these organizations have been facing supply chain challenges such as delayed/ cancelled orders, inventory shortage, lack of proper tools to capture and analyze data, high transportation costs etc.

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Challenges for retailers this holiday season

Inventory and distribution

Inventory shortages caused by a fragmented supply chain will underline the 2021 holiday season. Retailers typically have separate distribution channels for in-store order fulfilment and for fulfilling online orders. The strain lands on the distribution centre which needs to pay special attention to individual order packaging, shipment and capacity management. Most retailers have outsourced warehousing and order delivery to third-party vendors. But when there is massive volume during the holiday season crowding through package processing, shipping and delivery, bottlenecks arise. As a result, it takes time for an out-of-stock product to become available. Retailers thus need to plan ahead for stock availability, spike in demand and for returns.

Capitalizing on the season

For many retailers, planning for this seasonal demand can make or break their profitability for the year, especially as they rely on this season to generate more than 30% of their annual sales. Ensuring that the most sought after products are well stocked in time increases the complexity involved in managing demand spikes. Add to this online and BOPIS/curb-side pickup orders, and retailers also need to think about delivering product to online shoppers quickly and at the lowest possible cost.

Capitalizing On The Season
Omnichannel Management
Omnichannel management

Digital omnichannel supply chains and strategies allow retailers to provide a continuous user experience across any channel or location. AI tools like Retina can mine data to provide true competitive advantage and maintain intelligent routing to determine the fastest and cheapest method of shipment to meet consumer expectations. Retailers will need to invest in tools that can convert offline and online customer data into strategies that support seamless, omnichannel customer experiences across touchpoints.

We can expect the 2021 holiday season to be both bountiful and challenging. There will be inventory shortages, clogged distribution centres and overworked supply chains. Consumers omnichannel preferences and demands for faster fulfillment will keep retailers on their toes.

The keys to success for retailers will be smartly managing stores and online channels, maintaining the correct inventory, and completing orders despite persistent shipping issues. Curbside and BOPIS options will become important, as will personalized, omnichannel experiences. The good news is that retailers have learnt a lot during the pandemic and have become good at adapting to change. Though supply chain and shipping woes will persist; shoppers are ready to make it a very merry season.

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