Tag Archives: Holiday Shopping

The struggle for retailers – How do I fulfill all those orders, on time and within budget?

It’s December and retailers have kicked into high gear to meet the increasing demands of holiday consumer shoppers, both in store and online. If the Thanksgiving to Cyber Monday time frame in the United States is any indication, the strain felt by the retail supply chains is not going to subside during the Christmas season.

A recent article in the Wall Street Journal highlights the struggles retailers such as Toys “R” Us faced last year when it came to fulfilling all the online orders that taxed their systems. Click here for article. So what are we to make of this? Should retailers

Plenty to go around! If your supply chain is up to par.

Plenty to go around! If your supply chain is up to par.

throw their hands up and allow the mighty Amazon to march on, unabated? Of course not. Retailers must be increasingly savvy when it comes to their integrated online and brick and mortar strategies.

  • Be judicious with online promotions. Easier said than done, as the majority of consumers expect to get deals online, and better prices. But, retailers need to start being disciplined with their promotion and pricing strategies, and avoid running a promotion for the sake of it. They truly need to understand why and how this promotion will impact their bottom line.
  • Have a network view of all distribution nodes. The advantage traditional retailers have is the real estate they have invested in. While it is not always a positive, retailers must take a holistic view of their assets. Can they distribute popular, standard or fast moving items from their stores? View them as forward-positioned distribution centers. Hold back inventory that is more unique, less likely to be mass purchased back in true distribution centers.
  • Don’t be afraid to set expectations with customers. This is difficult, especially considering Amazon isn’t shy about taking a financial hit on some of their fulfillment promises. But why can’t retailers have a deeper understanding of their product assortment with associated costs? Certain items need to have a cutoff date – if you do not order by this point then there is no guarantee it will arrive by the desired date. Yes, this is available sometimes, but make these options crystal clear.

At times, retailers must feel like they are the dog that constantly chases cars – run, run, run, but alas the car is always faster than you. In a way retailers need to stop focusing all their attention on the car (aka Amazon) but rather focus on other dogs – can they out run them? Focus on your supply chain network. Is it flexible enough to allow the retailer to seek new offerings, new business models? Without the visibility and understanding of what is possible, what can you really hope for?

Retail faces a daunting task. Not only do they have to compete with the likes of Amazon but they have to keep up with our, the consumers’, needs and desires. A challenge, but a great opportunity.

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The holidays are approaching – does your supply chain need IoT to improve results?

As it seems to happen every year, the holiday season seems to sneak up on my faster and faster. I do not know if it has to do with my getting older. Maybe Pink Floyd had it right when they sang: “And you run and you run to catch up with the sun but it’s sinking…Racing around to come up behind you again.” Of course these lyrics come from their wonderful song Time which is something that all retailers and CPG companies have very little of when it comes to the holiday season. The time of the year that is loosely book-ended by Halloween and New Year’s Eve is when many of these companies make the majority of their fiscal revenues. These companies are always looking for whatever technological or process advantage they can leverage to improve their top line sales as well as gain margin. One of the most influential technologies is mobile.

We don’t need to rehash the growth of big-sale-shopping-cart-full-of-gift-boxes-vector_Mkgk8gDdsmartphones globally nor the amount of connectivity and functionality these smartphones put in our pockets. While as consumers we have become tethered to their mobile devices, retailers and CPG manufacturers are all working feverishly to crack the code as to how to maximize our relationships with our smart phones.

Whether pushing promotions and coupons directly to our phones, allowing for payment via our phones or even allowing cross channel sales between the application and brick & mortar store, the usage of mobility remains high on the functionality Christmas list for these firms. When we start speaking of mobility it begs the question – what about IoT (Internet of Things)? Their consumers are already connected via their smartphones, but can or better yet, should retail and CPG integrate IoT into their businesses? And how?

IoT is a hot topic – one that has opened the door to what appears to be vast potential for new business models. But as with many new technologies, not all supply chains’ adoption rate are at the same pace. When it comes to retailers and CPG companies, IoT can offer value – but not the same impact across the retail and CPG sub-segments. For example, in the footwear and apparel sub-segment does IoT mean putting sensors on every pair of sneakers or winter coats? Not necessarily. But making  the pallets smarter allows for better tracking of inventory, when does it ship, when is it received at a distribution center or within the retail channel? Better inventory tracking across the entire network would greatly improve these supply chains. However for those in the food and beverage space being able to do a more precise track and trace – via sensors – will mitigate the risk that arises when there is a food recall. Think of the recent problems faced by the likes of Mars Chocolate or Tesco, and one realizes what an impact better visibility and traceability would have for these firms and their supply chains. Rather than having to invoke massive recalls and spending valuable time to identify the root of the problem, leveraging more IoT would allow you to more quickly identify the root of the problem.

So next holiday season will we see a greater presence of sensors within our retail channels or attached to the side of Lego boxes? At early adopter firms I expect to see sensors and IoT being a greater presence, while I would expect a greater adoption of sensors for most of these firms through the back end of their supply chains. Both IoT and supply chain solution providers need to determine how they can assist and leverage this technology with their retail and CPG customers. As for CPG and Retail companies – determine how the usage of more sensors will impact your supply chain. Do not hesitate to work with your service providers to co-develop solutions. Look for more of our research in upcoming reports.

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Filed under Current Events, IOT, IoT, Retail, Supply Chain