Commentary

The key to holiday success? Inventory flexibility

Eric Lamphier, senior director of product management, Manhattan Associates, maps out why preparing for the tremendous spike in demand, that comes with the holiday season, requires significant planning and organization across the entire business.

Photo by iStock.com

November 6, 2018

By Eric Lamphier, senior director of product management, Manhattan Associates

It may be hard to believe, but the 2018 holiday shopping season is quickly approaching. For consumers, it's time to plan wish lists and shopping lists, and for retailers, it's time to finalize preparations and customer strategies for the busiest period of the year. Preparing for the tremendous spike in demand that comes with the holiday season requires significant planning and organization across the entire business.

System stress tests, for example, should start months in advance to identify potential problem areas and give organizations time to correct any issues before peak periods. Recruitment is another factor to consider, as many retailers bulk up their staff with temporary workers and must plan in advance for their training. Perhaps the biggest key to peak season success, however, revolves around inventory — specifically inventory insight, access and flexibility.

Serving the modern consumer

Today's consumers engage with brands both digitally and physically. Therefore, visibility into a holistic network that bridges the gap between channels is critical, as is the ability to service customers seamlessly, no matter how they choose to interact. Gone are the days of working out of one store or via one channel — today's retailers require the power to sell from a broad, multichannel inventory system, without delay. If an in-store shopper wants to purchase an out-of-stock item, retailers must be able to find that item elsewhere in the network and provide immediate fulfillment options, or risk losing the sale (and possibly the customer). Similarly, if an online shopper wants a hard-to-find item that's only available in stores, retailers should be able to locate and ship the item from the nearest store to the customer's home. While this network and inventory flexibility was once a “nice to have” feature, it's now imperative in today's digital-first retail world.

Getting a clear inventory picture

Additionally, as if existing holiday pressures weren't enough, the recent rise of next-day (or near next day) delivery puts even greater stress on supply chains and distribution centers, as well as a greater emphasis on up-to-date inventory visibility. When it comes to delivery times, consumer expectations have sky-rocketed, and in order to keep up retailers need both a well-oiled distribution center and complete end-to-end network visibility and flexibility to deliver quick turnarounds.

Achieving the “one network” nirvana requires having advanced, integrated inventory technology in place across the enterprise. Legacy systems simply aren't sophisticated enough to manage today's complex order, inventory and execution needs. To succeed in an ultracompetitive environment, retailers need to look at multifunctional technology, and an effective system needs to deliver visibility of inventory changes across the network in real-time as well as ensure that inventory is available in the right place, so it gets to the right destination at the right time.

Helping holiday shoppers

This need for network visibility holds true throughout the year, but it becomes especially critical during high-demand, peak shopping seasons, when inventory is needed quickly and when fast access to in-demand products can make or break a customer's experience. Consumer stress levels are often higher than normal around the holidays, and an inability to access a desired product could leave a bad impression of a brand. Conversely, if a retailer is able to access an out of stock item from another location and ensure its delivery to a consumer's doorstep, they can play the hero and build lasting brand loyalty.

The truth is, excellent peak season execution requires year-round focus — preparation should begin almost immediately after the previous holiday season ends, with an examination of lessons learned and a look at where systems could have performed better. Throughout the year, retailers must take the time to run "stress tests" well in advance of the rush, make sure labor is up to speed and most importantly, ensure that inventory is visible, available and accessible across the entire network — both digital and physical. For most retailers, the holidays represent the busiest and most lucrative time of year, so they can't afford to be ill-prepared. Implementing advanced technology to enable seamless inventory management during peak periods — and throughout the year — is a critical step for retailers hoping to make the most of the holiday season.