The holiday shopping season is in full-swing with customers trying to find the perfect gifts for friends, family members and co-workers. While the shopping season kicked off the weekend after Thanksgiving, retailers need to make sure their supply chains are well-oiled for the rest of the season.
According to the National Retail Federation (NRF), purchases at stores and websites fell 2.9 percent to $57.4 billion during the four days beginning November 28. However, two million more people made purchases this year compared to 2013.
Even with the lower numbers from the first shopping season of the year, NRF projects sales to rise 3.9 percent during the 2014 holiday shopping season compared to last year.
What does this mean for retail supply chains?
First, managers can now gauge which products are going to move quickly out of distribution centers. Fast-moving products should be stocked closer to operating areas to reduce travel distance. For products with different order velocities, a slotting plan should be developed to help ramp up fulfillment for seasonal products.
Retailers may also extend promotions or initiate new sales to improve revenue. According to NRF, consumers are more savvy and sophisticated than ever before. Many know there are more deals and discounts coming later in the shopping season causing them wait to make a purchase.
As volume spikes, supply chains will see more full-pallet or full-case replenishment orders. Setting up the distribution center to support cross-docking will save time allowing the workforce to move the products through the facility and build orders faster. Too many operations continue receiving, putting away and picking orders the same way they do during non-peak periods.
Managers also must begin preparing for returns and backhauls. A reverse logistics plans with the right provider and networks will make sure everything continues to run smoothly.
Finally, as holiday shopping reaches its peak, supply chain managers should be documenting all lessons learned so any challenges can be addressed and improved upon for next year.
While many supply chain plans for the holiday season have been in place for months, being able to address changes quickly can lead to a successful holiday shopping season for retailers.
