Tis the Season to be Shipping
The peak season for holiday shipping used to start in September, but carriers now say November is their busiest month, thanks to manufacturers and retailers better matching demand to supply.
You can make the case that demand-driven logistics practices drive retailing excellence by speeding inventory and slashing the sourcing-to-sales cycle.
You might even say that logistics pros are so good at speeding cycle time they've helped retailers push the holiday shopping season from post-Thanksgiving to pre-Halloween. Before most of the Halloween candy was on display this year, retailers were stocking shelves with artificial Christmas trees and holiday gift wrap.
"It might look like crass commercialism," says Bart Weitz, director of retailing education and research, Florida University. "But sometimes products are shipped early and stores need to move them out of storage." Onto store shelves?
I don't know if I believe that, but I do know that consumers are driving end-of-year holiday velocity—40 percent of consumers planned to start holiday shopping before Halloween this year, according to the National Retail Foundation (NRF). And retailers are looking for any way to expand the shopping season to adapt to today's market realities, especially if they are good inbound logistics practitioners.
Here are some holiday trends to consider:
Internet as competitor? Power is shifting away from retailers to consumers, finds a new Pierre Audoin Consultants survey. "Virtual" overhead is a fraction of store overhead, creating margin advantages for e-tailers. The NRF survey backs this up. Shoppers will spend about $800 on gifts this holiday season, and an average of 30 percent will buy online. That gives consumers more buying choice, and takes a big bite out of what they used to buy at the mall.
Will retailers virtualize virtual retailing to compete with the Net? The window of Ralph Lauren's Madison Avenue store in Manhattan projects a 67-inch image of items for sale inside the store. A thin foil mounted on the glass powers a touch screen. An outside-the-store credit card swiper lets consumers buy when the store is closed, or satisfies screenagers' urge to buy on the Internet even when outside the virtual world.
Discounting already? Wal-Mart announced aggressive price cuts of 25 percent or more on hundreds of electronic items. This is the second time the Wal-Martians cut prices this shopping season. As Wal-Mart goes, so goes the nation and other retailers are following its lead.
Unwrapping Seasonality Challenges details how retailers and suppliers face some of these issues through better demand forecasting, inbound logistics practices, and a mix of expedited services.
Getting the job done faster—with supply lines reaching two-thirds of the way around the world, higher product volumes, and many more SKUs—makes you honorary Santa's helpers, at least until after Christmas.