Are You Ready for Holiday 2011?
Holiday plans, merchandise assortments and inventory purchases are pretty well in place by now for most cross-channel retailers. But since many businesses gain such a high percentage of their sales and profits in the fourth quarter — as much as 60 percent — it's never too late to see what additional things can be done to increase sales and customer satisfaction. Here are some last-minute tips to consider:
What's the Outlook
for Holiday 2011?
Last year's holiday season saw a 3 percent to 5 percent increase in sales vs. the prior year for many of my clients' businesses. Already this year we have several large e-commerce pure-plays whose sales are trending 10 percent to 15 percent ahead of last year. Overall, retailers are being cautiously optimistic. Recent economic news, however — e.g., the decline in the stock market, slow economic and jobs growth, a stagnant housing market, the federal debt, rising gasoline and cotton prices — hasn't been good. A 3 percent to 5 percent increase in sales this year probably doesn't stay current with cost increases. Given this predicament, cross-channel retailers need to stress the convenience of shopping direct along with the subsequent savings on gas. Many of your company's products are on long lead times. From an inventory perspective, are your earlier product sales plans still realistic?
Ensure your marketing and inventory planning forecasts are in sync on a weekly basis. Get merchandise demand projections and receipt plans in line with marketing's weekly projections. That doesn't mean you need to redo all your forecasts, but a brief weekly meeting to be sure the two departments are within a respectable tolerance is necessary. If your company isn't doing this, start immediately. Marketing may be reluctant at first to release their projections weekly, but it's the best chance you have to keep your inventory in line with what's forecast.
Were there other factors that caused you to miss your inventory management goals last holiday season? Here are some examples:
- Did your e-commerce site feature products that merchandising or inventory hadn't been prepped on?
- What promotions caused unexpected peaks in orders? Was "free shipping" switched on and off, causing erratic results? A number of our clients in the past couple of years have had trouble moving inventory when they didn't offer free shipping and handling. Industry leaders like Amazon.com and L.L.Bean have conditioned customers to expect free shipping. Have you taken this into account?
- How did late delivery from vendors affect sales, back order costs and returns?