Escalated logistics costs, port congestions and heavy clogging of shipments are further complicating the holiday season.
The 2021 holiday season will be both as similar and as different as any other for a number of reasons. Expect it to be similar in that the familiar demand spikes, workforce optimization, and supply chain pressures will remain; however, it will be different in that retailers will have to contend with Covid-induced challenges such as shifting customer behaviors, social distancing regulations, and logistics guard rails for health and safety.
What’s more, certain new dimensions this season on escalated logistics costs, port congestions and heavy clogging of shipments, unavailability of adequate workforce are further complicating things.
Acing this holiday season means getting customer buzzing early, focusing on price and personalization, optimizing your workforce with scenario planning and simulations, and building an ecosystem of partnerships. Flawless execution or the ability to orchestrate operations dynamically in real time with synergistic handoffs, seamless communications, and quick recovery from the unexpected, will determine the winners.
The top six dimensions for this year include:
1. ‘Phygital’ Availability of Products
Tracking supplier deliveries and adjusting PO quantities based on both store and online catalog and inventory visibility will ensure that the right products in the right quantity and right price are available across stores and online.
2. Demand Sensing and Shaping
A scientific and dynamic approach to shape the demand in near real-time based on context will be vital. Retailers need to sense demand closer to the peak and read those signals to dynamically shape the demand as necessary. This demand sensing and shaping capability will need to be built ahead of time and leveraged with confidence at runtime.
3. Orchestration of Network Capacities
Integrated visibility and orchestration of network capacities, including DCs, FCs, stores, suppliers, partners, etc., needs to be coupled together to facilitate dynamic changes to flow paths, stock reallocation or even trigger capacity flex plans.
4. Workforce Agility
A trained workforce that can be deployed on demand and daily rosters with adequate lead time for communications to agencies and colleagues and factoring for potential absenteeism with adequate buffers are of paramount importance.
5. Synergistic Partnerships in Transport and Logistics
All inbound, outbound, and last-mile capacities needs to be planned weekly and monitored daily by shift by route, by fleet and partner. A focused and disciplined approach to relentlessly track, monitor, and enable availability, in partnership with ecosystem players, to fulfill demand will be a game changer this holiday season
6. Fanatic Customer Focus
Building a mindset of treating every order as a “gift” and delivering superlative experiences through visibility and insights powered by immaculate orchestration from source to destination can create memorable moments.
Navigating an unprecedented holiday season is all about agility, innovation, being purpose-centric, and focusing on P&L parameters. This holiday season is predominantly set to be “online driven, stores enabled, and ecosystem fulfilled.”
With holiday season sales accounting for almost 40% of retailer’s annual sales, retailers need to pull up their socks. As much as it is about a race to finish, the season is also about a race to start, requiring a “ready-set-go: approach. This is the time for retailers to double up and play Santa to recreate the magic of the season and create a win-win for customers and themselves.
Dheeraj Shah is global head business transformation and supply chain management at TCS.