Attention Shoppers!
The day after Thanksgiving in the US has long been known as Black Friday, the dark name for what is generally considered the biggest shopping day of the year (truth be told, the Saturday before Christmas often wins this honor). According to the US-based National Retail Federation, “Sales in November and December can account for as much as 30% of a retailer’s annual sales, and make up nearly 20% of the industry’s annual $3.2 trillion.” This same organization reported that roughly 738,000 seasonal workers were hired to support the 2013 holiday rush, doubling the number of hires since 2009. This number is expected to grow to nearly 800,000 in 2014, with the NRF expecting sales to increase 4.1% over the 2013 holiday season.
How many procurement departments at the different retailers are involved in managing this crush of a contingent workforce and what technologies are being employed? Procurement’s involvement in the management of contingent labor and professional services is a growing trend; an understanding of the Vendor Management Software (VMS) providers like Fieldglass, Beeline, and ZeroChaos and the Managed Service Providers (MSPs) will be increasingly important.
Flexible Supply Chains to Meet Changing Consumer Demand
What happens over the next five weeks will determine a great many things for most retailers. The same holds true for the companies whose products fill the retailers’ shelves – companies in the CPG, media/entertainment, and consumer electronics industries to name a few. While the holiday sales percentages may not be quite as high for the product companies as they are for the retailers, the stakes can be quite high. For example, having the wrong product mix on the shelves can be deadly. Not having enough of the right products in different stores can be painful. This is especially true now that many consumers are armed with mobile devices and can locate in-stock merchandise or even just a better deal elsewhere – like online.
Since the economic downturn of 2008 and 2009, consumer confidence has increased, along with e-commerce as a convenient and cost-competitive alternative to in-store shopping, driving holiday spending higher and higher every year. With more consumers shopping online at not only individual retailers but also online marketplaces like Amazon, manufacturers and retailers should be gaining more visibility and agility with their supply chains to meet evolving consumer demand. Every holiday season seems to feature the “it” product that generates a lot of consumer buzz – whether it’s the newest speaker system, TV streaming device (i.e. Chromecast, Amazon Fire), or flat screen television. Not having enough of the “it” product in store will cause many consumers to go online to find it, either at the retailer’s website or a competitor’s. Either way, the consumer is walking out the door without the product, and retailers failed to capitalize on the deal. On the other hand, if they overstock the item or items and they don’t sell before the New Year, retailers will have to steeply discount the products to clear room for new seasonal inventory.
Indeed, it’s a fine line that retailers walk between not having enough or having too much of the right product. Thus, knowing what consumer demand is for products, what percentage of shopping will be conducted online, and what product mix and perks will attract consumers to retailers (like free or express shipping) will help position retailers for the shopping season. And being able to locate inventory within the supply chain and deliver it to the customer will help retailers retain customers rather than have them shop with competitors.
We’ve discussed seasonal supply chain problems here on CPO Rising and in other publications like this Forbes story. When the different publicly-traded companies report earnings for this current quarter, it is always interesting to see how many corporate executives either credit or blame their supply chain for their results. Here is an earlier CPO Rising article about one CEO who has done this.
Sales – Attention Shoppers!
On the biggest sales day of the year, we just wanted to offer a quick reminder to all interested parties, particularly those working on next year’s budgets, that Ardent Partners is very much open for business. If we haven’t been in recent contact, it is because we have been very focused on our recent research. We would love to connect and share what we have been up to and discuss opportunities for collaboration in 2015. You can see some of Ardent’s services here. Drop us a line. Operators are standing by.
