Santa Claus Doesn’t Put Gifts on Backorder
With the holidays firmly in the rearview mirror, the start of a new year is the perfect time for retailers to reflect on how sales performed, whether they provided great customer service, and whether their supply chains delivered during a time that's critical for winning — or permanently alienating — customers.
Retailers work year-round to ensure they're well-stocked, prepared to market the season’s hottest products, and equipped to deliver those products when demand spikes. No matter how much work goes into preparing for the holiday sales rush, the slightest break in the supply chain can cause a big mess, both behind the scenes and among customers.
In the weeks that follow the hustle and bustle of the holiday season, and as retailers process all of those returns, there are a few best practices to put into place, even if the 2016 holiday season seems distant.
1. Create a seamless experience for customers. “Omnichannel” has been the buzzword for a few years, and it’s a great way to reach customers where they want to shop — whether it's in-store or online. They key to winning customer loyalty is creating a seamless experience across all channels and providing excellent service no matter where the customer chooses to shop. The most successful retailers are taking advantage of new technologies that help deliver that seamless experience. These tools provide insight on customer preferences, purchase history and create personalized recommendations to drive customer satisfaction and loyalty.
2. Optimize, optimize, optimize. Supply chain optimization helps avoid the practical reality of a failure when a retailer’s system is overwhelmed by orders — an issue that’s not uncommon during the busy holiday season. Today, technologies allow retailers to optimize everything from store layouts to competitive pricing, making it simpler to please customers, increase sales and reduce costs. Retailers that win with optimization are able to create a truly shopper-centric experience and deliver what customers want in a timely manner. For retailers, knowing your stock and keeping an eye on orders and fulfillment is critical. In reality, Santa Claus doesn’t put gifts on backorder, and he can’t make more of a product if it runs out before the close of the holidays.
3. Technology is everywhere — take advantage! In today’s digital environment, retailers have all the data they can dream of at their fingertips. For some, this means using the Internet of Things (IoT) to keep an eye on the supply chain to deliver more efficient, personalized marketing to customers in-store or online, and hopefully to grow sales and delight customers. In 2016, successful retailers will assess how much risk they're willing to take when it comes to technology, and then take action. That means they’ll have the ability to more accurately forecast sales and supply, plan for scheduled delivery of products, and predict behavior that can change product flow. The good news is that most retailers are already using data to their advantage. The recent TCS Global Trend Study revealed 56 percent of retailers are using IoT technologies to monitor supply chain and product flow.
4. It’s never too early to begin holiday prep. In addition to preparing for the next, seemingly far off holiday shopping rush, retailers should keep an eye on a few critical practices throughout the year that can make a big difference when peak season arrives. For example, assess whether there's disconnect between merchandising/marketing and operations. Misalignment between these two departments can cause an instant break in the supply chain, as focused marketing efforts may drive demand for a product that operations can’t deliver in a timely manner. Creating consistency between online and offline experiences is also key for customers who browse online, yet want or may be encouraged to purchase a product in their local store (Hint: retailers can save shipping cost and increase store turn.)
As consumers continue to adapt the way they shop, whether it’s in-store, online or on mobile devices, it’s critical for retailers to be responsive and accurate. Even in the event of a supply chain failure or out-of-stock product, retailers have the opportunity to win customer loyalty — or put on their Kris Kringle hats — if they can point shoppers to another place to find those hot products. While it seems early to be thinking about the holidays again, a bit of careful planning can set retailers up for a successful year ahead. And with delightful service, the holiday customer will become an everyday customer!
Rich Sherman is senior fellow, supply chain center of excellence at Tata Consultancy Services (TCS), a provider of IT services, digital and business solutions.