The Secret to a Happy Holiday Season? A Strong Supply Chain
The key to a happy holiday season? A well-planned inventory and smartly-managed supply chain.
Each year, the holidays put supply chains and the retailers that rely on them to the test, from manufacturing to logistics. Merchants, of course, are the consumer-facing entity and thus they bear the responsibility of ensuring customers get what they need for the holidays, without worrying about all the work happening behind the scenes.
This year, of course, will be drastically different in many ways. Foremost in the mind of retailers is the supply chain interruptions that interrupted the industry through the first half of the year. Some categories--like fitness equipment--still face extended delays, meaning there may be a shortage of bikes and barbells under the tree this year.
This, among other factors, will drive an early start to the shopping season--some experts say as soon as early October. That makes now a smart time for merchants to prepare for the holiday rush, including an audit of your supply chain. Here are a few tips to help you prepare.
1. Consult with your partners
While you likely have open lines of communication with your key partners--like suppliers, manufacturers, and logistics companies, it’s a good moment to have a focused conversation. Ask what challenges they may face this season, and how they could affect your business. Discuss ways you might be able to work together to overcome those issues--such as placing a larger order or subsidizing certain costs to ensure you get the products your customers want, and that your partner can fulfill them.
2. Create a contingency plan
If you don’t already have a contingency plan for supply chain gaps, create one now. Examine each step in your supply chain and develop protocols for when things get delayed, off track, or cancelled. It’s easier to make critical business decisions when you have clear guidelines to follow, as well as resources to inform you. Should you already have a contingency plan in place, now is a good time to revisit and update it. It’s a smart investment in your business’s resiliency.
3. Look at the data
While some purchasing trends have dominated headlines--like the shift away from formalwear and spike in home decor sales--others are less publicized. Review the latest purchasing trend data to see what consumers are buying to adapt to life in a pandemic, as well as what they’re opting for when what they really want is out of stock. This may allow you to push products you sell already, or find desirable alternatives to make sure holiday shoppers get what they need.
4. Under-promise and over-deliver
There are a lot of factors at play in the holiday season that are beyond merchants’ control, such as logistics company schedules, inclement weather, last-minute shoppers, and more. Set yourself up to over deliver — and thus delight your customers — by taking a realistic approach to operations this season.
Customers are now used to shipping delays and sold out products, so if your business is facing one of those issues, be up front about it. Clearly note when products are low stock or out of stock, keep customers updated on restocking, and be proactive about offering alternatives. When it comes time to check out, clearly communicate shipping deadlines (and be conservative in setting them), and ensure you have a robust and prepared support team to handle any issues.
5. Plan for returns
We don’t always get exactly what we want. The holiday season results in a huge volume of returns, which can be a headache for retailers, especially those planning and managing inventories. It can also be a big opportunity, though: each return offers a chance to demonstrate stellar impeccable service and retain the gift recipient as a new customer. Make your policies clear, fair, and then back them up with great service. That headache might just turn into a new loyal customer.
2020 aside, we at Afterpay are here to help our merchant partners and their customers have a successful holiday season. For more on how to prepare and come out ahead this season, check out our other stories on the upcoming holiday shopping season here on our retailer blog.
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