Know Your Market, Customers and Suppliers
It’s imperative to know both your market and your customer to best predict demand, so you must conduct not only historical, but also market research to produce a forecast as accurately as possible. To complicate matters, if you are an omni-channel retailer, you must be able to generate an even broader forecast across similar, yet differing demographics. Luckily, there are now a variety of tools to help hone and simplify that process.
“If you have effective inventory planning, you can sense demand,” Nuce says. “If you have demand signal management capability, then you can track [sales] based on past trends or on your current pipeline. Social data, or big data, is also important. Being able to integrate social feedback from grassroots consumer components back into your larger community can lead to greater success.”
Nathalie Regniers, industry and solution strategy director for supply chain management and product lifecycle management, Infor, also mentions the significance of historical data: “Within the demand planning process, historic profiles should be captured to understand uplift and lag behaviors. When holidays fall on different dates, companies should weight pre- and post-buying behaviors to accurately assign the uplift or lag to the correct dates. When holidays fall on the same date every year, such as Christmas, it’s important to use a learning forecast engine that adapts to changes in seasonality and growth.” In line with that reasoning, to generate better forecast results, adjust Black Friday and Cyber Monday sales from years prior in order to fully take advantage of that data.
While demand forecasting is essential to a successful holiday retail program, even more important is supply chain visibility in order to actually meet those plans, even when unforeseen events occur. In that case, it’s always best to have a back-up plan. According to Tamara Saucier, vice president of industry, retail solutions, GT Nexus, “End-to-end supply chain visibility allows leading companies to prepare and respond to holiday market demands. Deeper visibility further back into the supply chain allows logistics organizations to properly source and schedule cost-right delivery solutions. New levels of product and cost visibility also provide opportunities for optimizing carrier selection, route selection and mode selection. Flexibility and responsiveness are as strategic as the cost drivers.”
Alavi additionally stresses the priority of logistics and shipping—after all, what good does having the right amount of inventory in stock do if it doesn’t arrive in time? “Before the holiday season begins, retailers predict which items will be the most popular. That’s when it’s beneficial for brands to work with their transportation providers to discuss freight shipments, and if there’s a demand, the need for expedited shipping. It’s beneficial for retailers to work with suppliers that have flexible supply chain operations. For example, integrated transportation providers that have the flexibility to upgrade shipments from deferred air to express air are critical. Providing flexibility for guaranteed expedited shipping options with early delivery times to stock the stores before they open to the public is also important.”
Online… All the Time
To be omni-channel is to be channel-less because the shopping experience for a brand should be comparable no matter what channel is used. While it may seem counterintuitive, it’s consistency that shoppers are seeking—whether it be a brick-and-mortar store, an online shopping portal, an iPhone app, social media or any combination of channels—and that is what they expect. Is there room for different promotions, packages and options? Absolutely. Is there room for a discrepancy in customer service, price ranges, or receipt or availability of the product? Not so much.