Holiday Shopping Habits Throw Off Our Supply Chain Objectives

Is e-commerce growth preventing retailers from meeting their supply chain objectives?

supply chain objectives

Did you ever notice that stores see more foot traffic and increased retail sales around the holidays? Of course you did; that’s Retail 101. But how often do you think about the implications of holiday shopping patterns for other business areas in the retail organization–notably, the supply chain?

In the era of online shopping, we see that tremendous volume increases in the supply chain are occurring during the holiday season. Although the data for the 2017 season has not yet been released, it’s evident that the retail industry has in some ways failed to keep up with the latest holiday shopping trends.

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Glenn Master, contributing writer, shares some thoughtful observations on this topic in an article, “The Fallout of Holiday Peak,” in the March-April 2018 issue of LP Magazine. Master points out three key areas where the industry is falling behind in meeting its supply chain objectives. The first area is in volume projections. From the article:

Most retailers have analytic models that produce estimated volume projections to determine the number of orders that will be passing through the supply-chain network. This information is passed on to contracted transportation providers, allowing them to plan for the staffing models necessary to handle the anticipated product volume.

Despite all the computer analytics being used, the one thing that cannot be easily forecasted is how online ordering can be affected by the unpredictability of human behavior. This is especially true from Thanksgiving Day through Cyber Monday. In talking with my loss prevention peers in both retail and transportation, consumer sentiment was grossly underestimated going into the 2017 holiday season. So regardless of the current political atmosphere, the Federal Reserve raising interest rates, or the potential that North Korea may launch a nuclear bomb, US consumers were ready to spend money this holiday season.

Learn more about the other two areas where retailers need to be stepping up their supply chain game in “The Fallout of Holiday Peak.”

You can also visit the Table of Contents for the March–April 2018 issue or register for a free subscription to the magazine. [Note: if you’re already a logged-in subscriber, the previous link will take you to the current issue instead.]

This post was originally published in 2018 and was updated May 3, 2018. 

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