Any of you who work in supply chain, retail, fulfillment or shop, know that we are in entering into the crazy holiday season for retail. Otherwise known as the “peak season.” A season where we look forward to Black Friday, Cyber Monday and other massive revenue driving events. But does this mean anything anymore?
Much has been written about how we look at demand signals and where these are coming from. In the good old days, we looked at some simple times – Christmas peak season and back to school as the big events, with smaller events such as Valentine’s day and Mother’s day. Fast forward to today, and now we are seeing mini-peaks emerging all over the calendar. Whether they are artificial events such as Amazon’s Prime Day or Singles’ day in China, we are now seeing these types of commercially created demand spiking events. On a smaller scale, retailers such as Old Navy created artificial demand from their $1 flip flop day. But we also have to think about other bolt of the blue demand drivers. The latest one comes from the recent US Presidential election.
Those of us who spend much of last week switching between all the major networks as states were counting votes, were exposed to a number of pundits working the “big boards.” Whether MSNBC, Fox or CNN, we all watched as states and counties were analyzed over and over. Counties like Houston County in Georgia were highlighted as they were counting votes. Of course John King from CNN was corrected in his pronunciation. Outside of counting votes, an interesting demand spike emerged. As Steve Kornaki from MSNBC mentioned his stockpile of Gap Khakis on air, the San Francisco retailer enjoyed an unexpected spike in their Khaki pants sales. A pleasant outcome for the Gap. But in a world of hyper-connectivity and social media, we are seeing more of these mini-demand spikes. Whether it is national soccer team that goes further in a tournament than expected or a princess wearing a specific dress, demand spikes are and will continue to emerge from a random and unexpected places.
So what does this mean for retailers and their supply chains?
- It all starts with visibility – supply chains are always chasing the elusive network visibility. Being able to have a rich and real time picture of your supply chain. This quest for this Holy Grail continues to be elusive. But the effort must continue. Know what is happening within your supply chain is the first step.
- Rethink your inventory strategy – not simply when it comes to your working capital, but also your work in progress, raw materials to name a few. How do you better meet these demand spikes? Know what is available to promise, in real time. Rethink how you build and place your safety stock across your network.
- Work your data governance – end of the day, we are all digital and data companies. Double your efforts when it comes to how you work your overall data strategy. How are you leveraging data within your network, which sources are you tapping into and how are you internally leveraging this data?
End of the day, demand driven events are going to be difficult to predict and anticipate. Consumers, with all their available choices and empowered by their digital assets, are increasingly fickle and unpredictable. Retailers and their supply chains cannot depend on the predictability of known demand driving events. While they will continue to adapt to meet the demand associated with Black Friday, Cyber Monday, Singles Day, Mothers’ Day etc, they will also have to be nimble enough to meet demand spikes when a journalist gets prime time coverage for a week and is pitching your khakis.
The Thinking Frog 