How to Prepare for the Holiday Season Amid Supply Chain Constraints

For retailers across the country, preparations for the holiday shopping season began months ago. But with time left before Black Friday and Cyber Monday, let’s take a minute to consider the unique supply chain challenges generated by the ongoing pandemic, and the steps you need to take to make sure your business is ready to push over the finish line.

Today, supply chains are global in nature, and so are the disruptions.  According to a recent Forbes article, “Countries at the heart of retail manufacturing, such as Vietnam and Indonesia, are being swept away by surges of the highly transmissible Delta variant of the Covid-19 virus.”

Manufacturing disruptions and distribution bottlenecks are already presenting massive challenges. And for small and medium-sized retailers, including e-commerce-only operations, lining up inventory and predicting demand this holiday season will be particularly difficult.

At the same time, raw material shortages, labor shortages, shipping container shortages and port back-ups are causing delay and uncertainty in the production and movement of goods. Here are some key considerations to help your organization weather the holiday season storm:

Order Wisely

Your orders for holiday inventory should already be in. Even so, last minute adjustments and changes in manufacturing may be necessary. According to reports, in some cases brands are scrambling even at a late date to outsource manufacturing to new locations. Make sure you are in frequent communications with your manufacturing partners to ensure status of production.

Consider a Focused Inventory

Given the delays in securing certain products, some retailers are focusing their sales efforts – and their inventory – more carefully this season. A Washington Post article notes that “Many retailers are whittling down their toy and clothing inventories, offering fewer styles, colors and sizes, according to Nikki Baird, vice president of innovation at retail software provider Aptos.” Your company may want to determine if a specific sales focus may help with product shortages.

Get Ready to Ship

Getting your products produced and in stock is only part of the equation. Like last year, e-commerce sales will be central to holiday success this season.  eMarketer forecasts that total U.S. holiday retail sales in 2021 will rise 2.7% to $1.093 trillion, while the season’s ecommerce sales will rise 11.3% to $206.88 billion. Ecommerce will account for a record 18.9% of total holiday season retail sales.

To make sure your goods reach your customers safely and on time, you need to:

Secure adequate packing material now – the sooner the better.
Determine your shipping and returns policy, including free shipping offers, and clearly state on your website.
Ensure that your shipping partner has global experience, since your customers are increasingly international.
Understand peak shipping challenges, and work with a delivery team that knows how to manage high volumes and has the resources to ramp up for the holidays.

Anticipate Customer Concerns

With supply potentially limited and prices on the rise, you can expect additional questions and concerns from your customers this year. If you run out of inventory, for instance, and a shopper purchases an item but you can’t deliver, you will hear about it. You need to make sure your customer service team is ready to handle inquires. You should pre-prepare helpful responses and develop alternative options for customers.

Expect a New Kind of Post-Holiday

Because of current supply constraints, experts predict post-holiday shopping will be strong this year. Buyers who can’t find what they want for the holidays will be on the lookout afterwards. This presents both opportunities and challenges for your business: you will have the potential for strong sales, but you need to schedule your inventory, staffing and shipping in advance. So, as you prepare your inventory for the peak holiday times, you need to look beyond and plan for January and February sales.

What is your company doing to handle the supply challenges of 2021? Let us know on Twitter at @DHLUS.

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