Tricks and Treats for Holiday Inventory Management

Halloween kicks off a season of holidays and shopping. While retailers are already in the midst of candy and costume sales, the chaos isn’t over for supply chains as the winter holiday season approaches. And this year is expected to be busy.

The National Retail Federation estimates Halloween spending will reach $8.8 billion, the third-highest in the last 15 years, and winter holiday sales to reach between $727.9 billion and $730.7 billion, increasing between 3.8% and 4.2% from last year. This high spending is great news for retailers, but it puts a great amount of pressure on their supply chains to deliver the right inventory on time.

While retailers have been dealing with these challenges for years, consumers now have more options, such as online retailers and two-day delivery. With 71% of consumers saying on-demand delivery apps have changed how they want purchases delivered, a quarter of shoppers believe paid, standard shipping should only take two business days. This shift in customer expectations puts even more pressure on both online and brick and mortar retailers to have the right inventory at the right time.

The Tricky Balance of Holiday Inventory

Retailers have a lot to think about when it comes to peak season and the holidays. First, they need to understand the latest trends and anticipate what will be a hit with their customer. Most consumers turn to the internet for Halloween costume inspiration, meaning retailers need to keep a pulse on social media to know what they need to keep in stock.

They then need to figure out the delicate science of purchasing the correct amount of each item. If they order too little, they’ll lose sales to competitors. If they order too much, they’ll reduce their full-price sell through rate and end up with dead inventory.

And then there’s the timing of the delivery. All of this inventory planning and purchasing won’t matter if the products don’t get to the stores on time. If this time-sensitive merchandise isn’t delivered on time, it can result in wasted product and reduced returns. For example, retailers need to make sure they have enough of the right Halloween candy, decorations, and costumes. Yet, too much will result in post-holiday markdowns.

Then there are perishable products that have an even more narrow delivery window, such as pumpkins. If they’re harvested too early, they won’t last through Halloween. However, they’re unlikely to sell if they’re delivered in November.

To take on the numerous challenges and roadblocks surrounding time-sensitive and holiday inventory, many retailers are eager to gain visibility throughout their entire supply chain. Armed with advanced visibility data, they can make more informed decisions about inventory.

Visibility Is a Treat for Inventory Management

To make sure holiday-related products hit stores on time, it’s critical to have real-time insight into incoming orders and shipments. Retailers can use this up to date high-quality data to make smarter data-driven decisions about inventory management, better handle exceptions, and proactively adjust plans based on potential delays.

With visibility into inbound freight from suppliers, retailers can reduce inventory carrying costs and increase flexibility related to in transit inventory. For example, appointments can be rescheduled, and shipments can be rerouted to cover inventory needs.

Retailers can also optimize labor to make sure they have the right employees on hand during the chaos of the holiday season. With predictive ETAs, retailers have accurate and dynamic updates about when freight will arrive, allowing them to schedule the necessary staff at the right time. They won’t need to have employees waiting around the dock because they aren’t sure when the shipment will show up.

Retailers can only take this proactive approach with access to real-time insight into where the product is and accurate ETAs. Because retailers don’t manage all of the shipments to their stores or distribution centers, many are left calling suppliers and distributors for updates. Delayed access to location and ETA information diminishes its impact. To provide this perpetual data sharing, project44’s Collaborative Visibility feature allows customer to gain insight into their unmanaged, inbound freight even if their partners don’t use p44.

With this real-time insight, retailers are not only able to preserve their margins and reduce dead inventory, they can keep their customers happy by easily and accessibly providing the products that they want during the holiday season.

Planning for Future Holidays and Beyond

By knowing how products were transported to stores, how long it took, and where any delays occurred in the process, retailers can dig into areas of concerns to better prepare for next year’s peak season. With accurate and complete data into the transportation process, they can leverage advanced analytics to optimize their entire supply chain.

While peak season is top of mind for organizations right now, advanced visibility offers benefits that will last far beyond peak season. Incorporating visibility into your short- and long-term supply chain strategy will drive value for the organization year-round.

Find out how to delivery outstanding customer experiences during peak season.