Retail

Retail

Opinions expressed on this blog reflect the writer’s views and not the position of the Capgemini Group

Feeling the heat of Christmas in June

Despite the weather outside being frightful in much of the country, Christmas is still hardly the first thing on most people minds. We’re all waiting for the sun to start shining, the barbeques to be fired up and to have an excuse to hit the shops for our new summer wardrobe. For retailers, however, Christmas planning and production has been well underway for months, and like every year, the pressure to get it right is mounting.

Christmas is the “make or break” season for retailers, as the balance between having the right stock to optimise on customer demand and minimising spend on markdown is a fine line. How they perform over the Christmas period is one of the biggest drivers of annual performance, and therefore not only demands the most in depth planning, but also requires the most flexibility to react quickly to demand due to the relatively short selling window.

While there is no such thing as a crystal ball to tell us exactly what will happen, there are ways retailers can give themselves the best chance at thriving over Christmas:

1) Forward looking planning: Relying solely on what happened last year to predict what will happen this year is no longer accurate enough. Customers’ shopping habits and wants are changing so rapidly that retailers need to keep on top of expected market trends, weather and other factors such as social media which will impact their demand. Using big data and analytics are a powerful tool in understanding what their customers want.

2) Flexible supply chain: Committing to stock later, and in smaller, more regular intervals, ensures stock risks are reduced. Having a supply chain that can not only handle this, but that is also flexible to cope with required changes, will ensure the right stock is available when it is needed.

3) Reactive replenishment: Improved planning and supply chains will mean retailers have the right stock at the right time, but unless they send it to the right place, these benefits will be lost. Reacting quickly to what the customer demand is and where is it will mean better conversion, and ultimately less markdown due to having less stock trapped in stores which are not selling it.

So although you may not know what’s on your Christmas list yet, it is likely much of it is already in production, and that retailers have already thought about it for you. Their next challenge will be to guess where and how you want to buy it to ensure it is available when you do.

About the author

Harriet Quiney
Harriet Quiney
Harriet is a Retail Consultant who has been with Capgemini for 2 years. Having previously worked in merchandising she specialises in retail planning processes.

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