Forecasting consumer purchasing behaviour before the peak festive season is an inexact science at the best of times. In 2020, we have the worst of times. Due to COVID-19 and the latest government rules and guidelines across the UK, travel plans are fluid and shopping expenditure is unpredictable.
The shift to e-commerce and online shopping has not abated, but it has been tempered by the drop in disposable incomes. Consumers that have the resources are demanding efficient and on-time deliveries from retailers. Companies are having to show agility and adapt the way they manage their supply chains to meet fluctuating consumer demand during this peak period.
Pressure on retailers
Retailers, both online and in-store, are expected to hold increased seasonal stock levels, with focus on their best-selling items, whilst still ensuring consumer satisfaction. In general, they have adjusted well to erratic buying patterns and have shown greater adaptability when managing seasonal variations than last year. This is despite expected lower profit margins, higher transport costs and difficulties with returns.
It is not too late…
There are still actions that can be taken to smooth the path. There is time to review preparations and introduce some contingency plans.
- Review all communication channels in the supply chain. This includes both from and to suppliers, distributors, logistics partners, retailers, and customers. Communicate clearly and often.
- Ideally, there should be multiple ways of communicating with customers including phone, email, mobile apps and via online portals. Make provision for customers to feedback problems and issues easily so that you can take prompt action.
- Plan for a late surge of orders between December 18th and 24th. Additional staffs and logistics resources may be needed during this period and through the following week. Make contingency plans for extra deliveries.
- Check that stock is where is it supposed to be, either in-store or in the warehouse ready for picking, packing, and dispatching. Pay specific attention to bottleneck areas.
- Be flexible in your staffing operations so that you can deal with fluctuations in demand. Make sure temporary staff are properly trained to increase productivity and reduce errors.
- Ensure that you can fulfil your specials and promotions as promised. Failed deliveries and bad experiences lose customers and harm reputations.
- Establish a clear procedure for handling returns and communicate it to all partners in the supply chain. Include reverse logistics processes for processing, repairing and making them available for resale. Be realistic about the number of customer returns which may be higher than last year.
The December-January period is always an incredibly stressful time for those working in retail and logistics, due to tight deadlines and increased volumes. This peak trading period will be very different from previous years. But, if customers receive the goods they order over the festive period, at the right time and in the right quantity, in the right place, then the seller has done his job effectively.