How to Manage Demand and Inventory Over the Holidays With COVID 19
Nick Shaw is the Chief Revenue Officer (CRO) of Brightpearl, a leading provider of inventory, warehouse management system and order management software. He is responsible for Global Marketing, Sales and Alliances for the leading retail inventory management software provider. Nick has written for sites such as GetFeedback and Rtinsights. Here is Nick Shaw’s LinkedIn.
It won’t be long until we reach the most important period of the retail calendar – Christmas. With COVID-19 having disrupted so many lives, it’s fair to say that a lot of people are looking to this Christmas with a great deal of anticipation. After all, most of us could probably do with a pick- me up.
That said, there are a lot of questions retailers are going to have to ask themselves ahead of the upcoming festive season. Firstly, what is world class customer service likely to mean in the midst of a pandemic-affected Christmas, and how might exceptional standards be maintained? And more fundamentally, how will the after-effects of the virus affect demand for the most sought-after products? How will supplies be maintained?
We’re all flying blind at the moment. None of us know how long the pandemic is going to go on for, or how long it will take for us to return to something like normal. One thing we can reasonably be sure of is that this won’t happen until next year at the earliest. We’ve already seen that the impact of COVID-19 on ecommerce has been huge, which means we’re going to have to be especially resourceful and adaptable this Christmas.
None of this means that we can’t make the coming Christmas one to remember (for the right reasons). However, there will be challenges. Inventory management in particular is likely to be complicated by the unprecedented circumstances we’re in. So what impact is the virus likely to have on this year’s all important holiday period, and what can retailers do in order to brace themselves for that impact?
Here we’ll take a closer look at the likely implications of the pandemic on this year’s Christmas shopping season, and what measures retail firms are taking to adapt.
How COVID-19 is Affecting Retail
Retail buyers usually make their orders for the Christmas season in early summer, around June and July. Often, this involves attending trade shows or meeting with sales reps to discuss new products. This is because Christmas retail demand – in other words, which items are going to be the biggest sellers – is generally pretty easy to predict. But with the onset of COVID-19, many of our previous assumptions have simply gone out of the window.
Normally, you’d be able to look at the data, create a chart,and work out well in advance what consumers are likely to be buying come the festive season. But the virus has forced retailers to change tack. Events that would have been a key part of the calendar were cancelled, and orders that would have been made at the start of the summer have been put off, meaning that they’re going to have to be made only a short time before they need to be delivered.
We’ve already seen what can happen when supply chains become disrupted; the surge in demand for some basic necessities in the spring (most infamously, toilet roll) resulted in empty supermarket shelves as shoppers scooped up whatever they could get hold of. Luckily, the seasonal spike in demand at Christmas remains much more predictable, so retailers should be able to adapt as necessary.
How Retailers Can Adapt This Christmas
There are a number of measures which retailers might take in order to help them maintain a steady flow of supplies over the Christmas period, and ensure that consumers don’t go away empty handed. They may simply make educated guesses about what shoppers will be looking for and build up their inventories on that basis.
Nevertheless, there may be items which end up in short supply. Retailers could impose restrictions on products in particularly high demand, allowing shoppers to buy only a certain quantity of these items. No retailer will relish this prospect, but careful order management will likely be necessary in order to avoid a repeat of the scenes we saw in the spring.
Product substitutions may also help to ensure that even if customers can’t get the exact item they wanted, they’ll receive an acceptable alternative to it. However, consumers often criticise retailers for choosing product substitutes seemingly at random, with little resemblance to the original order. If businesses are going to resort to this they’ll need to ensure that shoppers aren’t lumbered with replacement items that are no use to them.
It’s also important to think about how retailers might go about fulfilling orders, with social distancing measures still in place and many people restricting their physical contact with others. With last-minute delivery likely to be put unders train, options such as curbside pick-up look to be a useful alternative. This would allow customers to make orders online and then collect their purchases without having to risk venturing out to potentially busy shops.
Great communication is going to be one of the most important strategies that retailers employ over the forthcoming Christmas period. It is a good idea to encourage shoppers to sign up for regular updates well in advance; this is already practical in normal periods, but especially so when there’s so much uncertainty around. Post-purchase emails can be useful for keeping customers in the loop.
Retail is a tricky and turbulent business even at the best of times, with intense competition between businesses. Of course, consumer expectations are changing all the time, especially since the rise of online retail. If you aren’t meeting those expectations, even in these unique circumstances, your business is likely to suffer as a result. Holiday ecommerce is vitally important in this regard, as so many consumers look forward to it all year.
There are many other steps you can take to brace yourself for the impending spike in consumer demand. Omnichannel retail software can help you run multiple channels (in-store, online, mobile, social media, and so on) at once, giving you an integrated overview of what’s happening across the board. At a time when so much is uncertain, this kind of visibility and insight could make an important difference.
More than anything, though, flexibility, and adaptability will be the watchwords this Christmas. Neither retailers nor consumers know exactly what to expect, but we’ve already seen that both have been remarkably resilient in the face of such difficulty. There will unquestionably be big challenges this Christmas, but there are reasons to be optimistic that businesses and shoppers alike will find ways of adapting and getting through it together.