As we enter the final months of summer and look toward fall, you should be thinking about what's ahead — the holiday season.
With predictions that customers will shop earlier for gifts combined with high inflation impacting consumer behavior, you need to take a good look at your inventory management strategy for the upcoming 2022 holiday season.
Let’s take a closer look at how and why to manage your inventory effectively.
Seasonal sales rely on accurate holiday inventory management.
Use inventory forecasting for to predict demand.
An inventory forecasting process will help you make better business decisions for future sales, especially during specific time periods like peak sales months. Inventory forecasting, also known as demand planning, is a process that uses data-based information of historical patterns and trends to make inventory estimates for the future. When you plan inventory correctly, you’ll see more sales growth opportunities while saving valuable time and resources.
When products are available to ship to customers at the right times, this helps the order and fulfillment process run smoothly, especially as your sales continue to grow.
Inventory forecasting is an important factor when it comes to convenience, an essential part of the overall customer experience. Customers expect shopping to effortless and convenient — we found that 76% of consumers say convenience is a priority when selecting a retailer. When enough stock is available to keep up with demand because of proper inventory forecasting, and the customer gets their order within the promised time frame because your business avoided overselling, that is part of convenience.
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.”
Retailers should look at supply chain diversification as one strategy to get ahead of any supply challenges. This is a strategy retailers can adopt to increase the range of suppliers available to order from. The more suppliers, the less of the risk of backorders. If one supplier can't meet your demand, you'll have backup options. Supply chain diversification is an excellent strategy to reduce ecommerce risks as the holiday season approaches.
Strong inventory management is crucial for promotions and seasonal success.
The type and range of the holiday 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.
When selling across multiple channels, including marketplaces and social commerce, these sales channels become a lot easier to manage with automated inventory and order management. An automated system gives you control from one platform. And you want to have that kind of strong handle on your inventory for a successful holiday season.