Few retailers have a robust plan ready for the “shortest runway to Christmas since 2002”.
I have had hour long meetings with 9 retail firms in the last 20 hours at Shop.org (Chicago). One thing that strikes me as surprising as well as concerning is the lack of preparedness for a very short holiday season (3 week time between Thanksgiving and Christmas). Most retailers that I met with are still unable to fully fathom the “impact of one less week – 25% less time” on online demand.
There are many reasons why retailers need a very strong Plan A as well Plan B this holiday season. Here are my top 5 –
- Y/Y Online sales has grown by around 20% (YTD August 2013). Assuming that this pace of growth continues (in my opinion it should actually increase) through the holiday season… retailers will have to be ready for 20% extra sales in 25% shorter runway. That’s a BIG IMPACT on each and every aspect of your ecommerce engine – whether it be marketing or shipping or inventory management and forecasting. Big Question for you: When is your “last ground shipping day”?
- The pressure will be as much on online shoppers. We all know that online shoppers have a habit to delay their purchases (quite literally till the last minute). I shudder to think of the “mad rush to buy online” between 12/15-12/19. This will lead to an unprecedented high load on most ecommerce sites. Website crashes will increase! Big Question for you: What’s the incremental load bearing capacity of your ecommerce site?
- Daily sales forecasting and tracking actuals vs. forecasts is necessary during holidays. Even more so this holiday season. Any daily forecast – actual gap will need to be “bridged” immediately. It will be impossible for merchants to close the gap for anything beyond 3 days of missed sales. Big Question for you:Do you have a realistic plan to bridge the sales gap in place before the holidays?
- Product stock outs will be more frequent. Because of a very simple reason – most retailers “do not have the ability to accurately forecast” for a holiday season that barely has a precedence in terms of number of days, volume of transactions, changing buyer preferences, etc. Back order management will have to be efficient. Big Question for you: Do you have a product stock out communication plan for your customers (to minimize “brand dissonance and brand switch”)?
- Huge market share swings will happen. A shorter holiday season will be a brutally powerful force in driving significant market share shifts. You are either a WINNER or a LOSER. A clear divide is imminent. Big Question for you: How are you tracking market share shifts?
- (BONUS REASON) Your call center/customer service support will be subjected to unprecedented pressure. Their servicing abilities will be stretched to the limit this holiday season. Big Question for you:Has your customer service center been made aware of the pressures they can expect and are they prepared?