Are You Ready for Holiday 2011?
Double-check what your marketing department is planning for the holiday season. Successful strategic inventory management relies on tying creative and marketing plans to merchandising plans. Marketers and merchants need to develop companywide planning calendars and projections for all promotions in all channels — catalog, online, email, retail stores, mobile, display ads. Merchants and inventory control groups can then plan product purchasing, availability and receipts to support these events.
There are three aspects to this type of planning:
- the marketing department compiles and continually updates the marketing calendar;
- the marketing team forecasts the expected orders by week for each promotion; and
- the inventory control and merchandising teams plan the demand in units for the promotions.
Email campaigns often prove challenging for merchants. While these campaigns may appear on the marketing calendar, all too frequently no one decides which items will be promoted until four weeks to eight weeks before the actual date of the promotion. By then the merchandise has been ordered and may already have arrived in the distribution center. This lack of planning can cause friction between channels for best-selling products, leading to customer frustration and back orders.
Another trend I've seen over the years is consumers waiting longer and longer to do their holiday shopping. With the continual growth of e-commerce buying, consumers have developed a "point, click and deliver" mentality. Consumers waiting until the last minute and extended shipping times put pressure on merchandising teams to be good at projecting the compressed selling time frame. How much compression of the order curve does marketing expect?
Consider how your business is being promoted differently this year than last. Are there customer segments different from the past that could affect the order flow? Are the finalized catalog page/positions in line with your earlier plans? Is your website featuring products that you don't have depth in supply? Are there changes that can still be made and accepted by creative and web departments?
Coverage is defined as having sufficient quantities of products already in your distribution center when a promotion is in-home. Retailers need to develop coverage reports to show how much is in the distribution center vs. the initial demand projected. Since 50 percent or more of orders related to a catalog drop take place in the first four weeks after the mailing, if you don't have sufficient quantities of a product by the time the catalog hits consumers' mailboxes, you're going to create back orders early in the promotion. How's your coverage for all products?
Another area to look at is your inbound transportation. What are the ramifications for your planned service levels and what you need from your carriers? How well did your carrier(s) perform last year and what can be changed?
Expected Receipt Dates and Product Info
These are two things that will help your customer contact center keep the customer fully informed. This is often a source of friction between merchandising, inventory and the customer contact center when it's not maintained in a timely manner. Is this information up-to-date and ready to go?