With holiday season ecommerce sales forecast for record growth in 2021, you should already have started preparing for the season.
But combine this growth in sales with the current supply chain challenges that so many retailers are currently facing, it’s clear that having a strong handle on your holiday inventory will be vital if you want to cash in on holiday sales this year.
Let’s take a closer look at how you can head into the holiday season feeling fully prepared.
In 2020, ecommerce accounted for $185.88 billion of holiday season sales. For 2021, that’s forecast to increase to $206.88 billion, making up a record total of 18.9% of all holiday season retail sales.
One reason for this growth is that brick-and-mortar retailers like Target and Walmart are choosing to close their stores over Thanksgiving and Black Friday, as holiday shoppers continue to move their seasonal shopping to online providers.
Balancing this increased demand for sales with unreliable supply chains is a challenge faced by ecommerce businesses across the board.
The main threat to seasonal sales for ecommerce businesses is a lack of inventory created by supply chain issues. These are wide ranging but include delays unloading goods at ports, increased freight costs, and shortages of specific products.
Tad Frost, COO at Short Par 4 says, “You have to be aware of the delays in the supply chain and the only thing you can do from there is plan. If you don’t plan and think ahead of it and think about how to plan for a promotion that will ultimately be 6-10 months out potentially, then you are only hurting yourself.”
Supply chain challenges aren’t going anywhere anytime soon.
Tad adds: “Today, the supply chain is very difficult. I don’t see that changing for probably another 2-3 quarters at best if it doesn’t get any worse. Who knows what it will be like when we revisit this conversation 6, 9, or even 12 months from now. Demand will go up, but it will be difficult for the supply chain to have the resources and the people to fulfill and operate a business to help meet the demand.”
The only course of action is to plan much further ahead than usual to meet customer demand. This strategy largely depends on having a solid inventory management system in place.
It's best to prepare your holiday season strategy now so you'll feel in control as sales start to ramp up.
The type and range of the promotions you decide to offer across your channels will depend on your inventory of specific items. If you do not have enough inventory to meet demand, you may have to consider canceling promotions on particular items, primarily if these usually sell well at full price. Instead, it’s a good idea to offer strategic promotions on items with plenty of stock, although you may choose to offer a lower discount than in previous years.
If you sell across multiple channels, including third-party marketplaces, social commerce, DTC, then it’s vital to have a plan when it comes to automatically managing your inventory across all of these. It's vital to have a strong handle on your inventory for a successful holiday season.
Take control of your inventory with an inventory management system in place to make the most of the year that looks set to break records.
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