UK retail is starting to bounce back from the pandemic. A recent surge in sales has proved positive for balance sheets but challenging for retailers needing to restock shelves and replenish inventories.
Now, as companies recover from one peak, they must be ready for the next one. Ben Balfour, Business Operations Director at Advanced Supply Chain Group looks at how to prepare supply chains so that retailers can cash in on the peak seasons of Black Friday and Christmas.
Data from the British Retail Consortium shows the strongest quarterly retail growth on record, with a 10.4% surge in sales in the second quarter of this year, compared to the same period in 2019.
Sales in recent months have been buoyed by the reopening of non-essential shops, Euro 2020 and staycations. There’s been a release of pent-up demand, as consumers loosen their purse strings and spend the money they saved during lockdown. And, with some estimations that Britons amassed £250billion during lockdowns, there’s optimism that pent-up demand will continue to be released to fuel bumper Black Friday and Christmas sales.
A control tower view
Retailers must be ready to meet peak demand and an agile, well-managed supply chain strategy is critical to this. This will ensure the right goods are available at the right time, in the right places and in the right quantities.
To achieve this and prepare for peak, retailers must have a real-time control tower view of their entire supply chain. This should be informed by data from the point of product supply, right through to the multiple points of sale. It will provide total visibility of stock flow – a fundamental starting point for determining current capacity and planning the timely arrival of goods.
Intelligent and integrated supply chains
For stock inventory management data to be accurate and useful, all sales channels must be fully integrated into the supply chain management strategy. There shouldn’t be any delay between a sale happening and the resulting adjustment to stock inventories, even if the process involves a third-party vendor. The information must flow immediately, with all sales channels communicating with each other and coordinated by a central hub.
The immediate and continuous exchange of data enables more accurate stock forecasting, and analysis of sales trends. Our bespoke web-based supply chain management tool Vector has been developed with this in mind and to provide companies with live, up-to-date stock inventory management information at the touch of a button. It achieves the control tower view of the whole supply chain, which allows retailers to scenario plan for peak periods and make more informed decisions about ordering and resourcing.
Retail businesses can create different supply and demand models, meaning they can more quickly react to changing requirements and optimise stock flow. It can prove the difference between costly stockpiling and expensive out-of-stock situations, and the ability to more effectively satisfy surges in peak demand.
Seamlessly joining up all sales channels can also provide rich data that helps to plan sales promotions. The increasingly competitive nature of the Black Friday and Christmas peak, and growing expectation amongst consumers for deals, can mean flash discounting and short-term price reductions. Retailers must be in a position to quickly respond to changing retail selling prices in the market or to lead the way in adjusting these to drive sales.
Analysis of sales, existing stock levels and availability of replacement stock can be used to quickly evaluate the effectiveness of possible price promotions. Companies can more accurately pinpoint timings for achieving optimum selling prices and ensure that they don’t price themselves out of peak demand.
Preparing supply chains to capitalise on peak requires making timely and accurate decisions. A control tower view of stock inventory management enables this through a greater understanding of what, when and why goods are successfully selling, and ensures retailers have the right volume of goods to sell at the right time and at the right price.