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 (NRF), holiday sales in the months of November and December are expected to rise once again this year, ranging between $957.3 billion and $966.6 billion, an increase of between 3% and 4% from last year’s $929.5 billion. The holiday crush represents an enormous chunk of the retail industry’s annual haul. Currently, the retail industry accounts for $3.9 trillion of the US GDP and employs roughly 52 million employees. While holiday spending continues to rise year-over-year, seasonal hiring continues to fall. For 2023, the “NRF expects retailers to hire between 345,000 and 450,000 seasonal workers. That compares with 391,000 seasonal hires in 2022,” and still well below its peak of 765 thousand seasonal workers in 2013.
C-Level Wishlist: 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 as high for product companies as for 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 television, PC and laptop, or the iPhone 15. 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.
The CPO’s Wishlist: Seasonal Support, Smart Technologies
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.
So, what does this all mean for Chief Procurement Officers (CPOs)? They need to manage the ebb and flow of contingent workers and consider what technologies to employ in order to facilitate the process. 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 SAP Fieldglass, Beeline, Prosperix, VNDLY (Workday), Coupa, and Magnit and the Managed Service Providers (MSPs) will be increasingly important.
And speaking of technologies, CPOs increasingly need to consider how to track and trace commodities and products, whether they are raw materials, sub-components, components, or finished products, as they traverse global supply chains to fulfill business needs. Beyond logistical/operational concerns, end-to-end track-and-trace capability has myriad supply risk implications, not the least of which is brand or reputational impact. Fortunately, there are technological innovations being developed and integrated to lend a hand, like advanced analytics, artificial intelligence (AI), connected devices (the Industrial Internet of Things, or IIoT), generative AI (ChatGPT), robotic process automation (RPA), and other innovations.
Companies like SAP Ariba, Everledger, IBM, Maersk Group, Merck, and other firms have partnered to connect Blockchain and other smart innovations, like AI, IIoT, and RPA, with physical supply chains in order to drive visibility, risk management, and compliance into global supply chains and improve business performance. How these technologies and innovations interplay may very well affect procurement and supply chain operations during future holiday seasons; but for most CPOs and supply chain teams today, they are on next year’s holiday wish list.
Sales – Attention Shoppers!
On the biggest sales day of the year, we just wanted to remind 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 upcoming CPO Rising Executive Roundtable series and other great research studies. We would love to connect and share what we have been up to and discuss opportunities for collaboration in 2024. You can see some of Ardent’s services here. Drop us a line. Operators are standing by.
