Challenging 2009 Peak Retail Season Pinpoints Top Supply Chain Strategies for 2010

Inventory, forecasting and supplier strategies yield success, but retail companies still have catching up to do to reach pre-recession sales levels, Tompkins Supply Chain Consortium reports

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Raleigh, NC — March 24, 2010 — Peak season sales numbers for 2009 moved in a positive direction overall and are encouraging retailers to continue their proven strategies in the coming year, according to a recent Tompkins Supply Chain Consortium survey report.

"The good news about the promising peak season numbers is welcome," says Bruce Tompkins, executive director of the consortium and author of the report, "Lessons Learned from a Tough Market." "However, retail companies still have some catching up to do to reach pre-recession sales levels. Using the lessons learned from 2009 will help them move forward with recovery."

To get a snapshot of best practices for the 2009 peak season, the consortium polled top retail companies on the supply chain strategies they used to get the most out of people, processes and technology.

The top four retail inventory planning strategies used by respondents were:

  • Reduced inventory levels
  • Increased emphasis on forecasting
  • Improved planning processes and tools
  • Increased reporting and information

These strategies, which retailers will continue to emphasize in the future, produced strong financial results. (See chart below for more strategies.)

Key Supply Chain Strategies for Retailers

The survey also shows that reducing inventories did not negatively impact sales volume; inventory levels remained high enough to decrease the chance of stock-outs. Nearly one-third of those surveyed did not see any lost sales due to reduced inventory, and two-thirds lost less than 5 percent of sales due to inventory reductions. Ten percent had improved sales numbers.

Another factor that played into the successful peak season for retail companies was minimal price discounting. In general, survey respondents used less price discounting in 2009 as compared to 2008 and compared to the amount of discounting that was anticipated. (See chart below.)

 Discounting Strategies for Retailers During 2009 Peak

Looking ahead, retailers surveyed said that they plan to focus on the following strategies for the 2010 peak season:

  • Optimizing inventory levels and placement
  • Improving forecasting methods
  • Continuing to refine SKU base
  • Executing initiatives with suppliers more effectively

The report is available (registration required) here. More information on the consortium is available here.