Gift giving is a major part of the holiday season. As a result, the holiday seasons is hectic, not only for the consumers, but also the retailers and manufacturers supplying the gifts. Supply chains and logistics processes must be in place in order to satisfy consumer demand, with supply chain management a critical part of people enjoying the holiday season.
During the holiday season if customer demand is not met, sales will be lost, hence why supply chain and logistics processes must be efficient to handle the increased gift giving and demand. Retailers must have the most popular gifts on the shelves at the right times to make a sale, which is why accurate forecasting of holiday demand is so crucial.
Supply Chain Management
Supply chain management when it comes to forecasting is not an easy task. Due to a shift in consumers increasingly using online forums and social media, it is easier to quickly identify gifts – even before their release dates. Moreover, with businesses increasing their marketing efforts through traditional and digital media, months prior to the festive season beginning, the demand for certain products can grow exponentially. It is imperative to have effective supply chain management processes in place so that out-of-stock scenarios are reduced. If not, this can lead to low customer satisfaction.
Ineffective stock management processes can also lead to many other challenges for products and brands. This can include the pressure it puts on distribution channels as manufacturers attempt to cope with additional last-minute orders, that need to be shipped in time. Or, if a business decides to increase its stock of product and over-stock in the run up to the holiday period, they risk great losses if the stock does not move.
Analysing Data Sources
Knowledge is the key to success. If businesses can identify in advance which of their product lines will be successful and when major peaks in demand will occur, then they can plan accordingly. In the past however, there was little that businesses could do in this regard beyond looking at historical sales trends and trying to forecast from them what will or will not be high in demand in the season ahead.
Today, businesses have a lot more data at their finger-tips. Due to data analytics, businesses can gather data from a wide variety of sources. This includes structured business data, such as past sales figures, as well as unstructured data from an array of sources. These different data sets can then be analysed for any interesting correlations that might help businesses predict the big trends of the holiday season to come.
In this respect, social media data is an increasingly more important unstructured data source available to consumer goods businesses. If businesses can collect tweets, likes, public posts and other social media data they can build an accurate picture of where public taste is heading in the lead up to holidays like Easter, Thanksgiving or Christmas.
Monitoring Supply Chains
However, predicting what will resonate with customers and when is only one facet. Once the season is upon us, consumer goods businesses still need to monitor their supply chains to ensure actual results are matching their predications. This allows them to be flexible in distribution accordingly and keep their customers happy.
The key to a successful holiday season is in essence about understanding what will be in demand and delivering on it. In part this process involves predictive analytics and in part real-time visibility of supply chains and a flexible approach to distribution. The result is a profitable peak season where supply matches demand well therefore diminishing customers disappointment.