How to manage inventory over this holiday season

With the holiday season right around the corner, if you haven’t yet prepared for the ramp-up in business, now is the time. With COVID-19 having disrupted many lives, it’s fair to say that a lot of people are looking to this holiday period with a great deal of anticipation. Some companies usually do up to 50% of their business in the last quarter of the year thanks to Black Friday, Cyber Monday, and of course – Christmas.

With all this being said, there are a lot of questions retailers are going to ask themselves ahead of the upcoming festive season. First of all, what is world-class customer service likely to mean in the middle of the pandemic affected holiday season, and how might exceptional standards be maintained? And secondly, how will the after-effects of the virus affect demand for the most sought-after products? How will the supply chain work?

Unfortunately, nobody knows how long the pandemic is going to go on for, or how long it will take for us to return to something normal. One thing we’re sure about is that it won’t happen until next year at the earliest. We’ve already seen that the impact of COVID-19 on eCommerce has been huge, which means we’re going to have to be especially resourceful and adaptable this Christmas.

This doesn’t mean that we can’t make the coming holiday season one to remember, however, there will be challenges. Inventory management in particular is likely to be complicated by the unprecedented circumstances we’re all in. So what impact is the virus likely to have on this year’s all-important holiday period, and what can retailers do in order to brace themselves for that impact?

Let’s take a closer look at the likely implications of the pandemic on this year’s holiday shopping season, and what measures retail firms are taking to adapt.

The impact of COVID-19 on Retail

Retailers usually make their orders for the holiday season in early summer, around June and July. Often, this involves attending trade shows or meeting with sales representatives to discuss new products and promotions. This is because the holiday season retail demand is generally pretty easy to predict. But due to unprecedented circumstances, many of our previous assumptions have simply gone out of the window.

Normally, you would be able to look at data from previous seasons, create a chart, and work out in advance what consumers are likely to be buying during the holiday season. But thanks to the virus, events that would have been made at the start of the summer have been put off, meaning that they’re going to have to be made only a short time before they need to be delivered.

We’ve already seen what happens when the supply chain gets disrupted, for example when the surge in demand for toilet rolls caused a scarcity in something that we take for granted each day. Luckily, the seasonal spike in demand during the holiday period remains much more predictable, so retailers should be able to adapt as necessary.

How can retailers adapt to this holiday season?

There are quite a number of measures which retailers might take in order to help them maintain a steady flow of supplies over this holiday period, and ensure that consumers don’t go away empty-handed. Some retailers might simply make educated guesses about what shoppers will be looking for and build up their inventory on that basis.

There will always be items that end up in short supply and retailers could impose restrictions on products in particularly high demand, allowing shoppers to buy only a certain quantity of these items. This is why it’s important to stock your inventory in advance – it’s always important to stock up on holiday inventory, but now it’s more important than ever. Many shipments have been delayed due to the pandemic, so the sooner you order your inventory, the better.

Another option would be product substitutions – this can help ensure that even if the customers can’t get the exact item they wanted, they’ll receive an acceptable alternative to it. However, consumers often criticize retailers for choosing product substitutes seemingly at random, with little to no resemblance to the original order. If you are going to resort to this, you will have to ensure that shoppers aren’t lumbered with replacement items that are no use to them.

It’s also essential to think about how you will go about fulfilling orders, with social distancing measures still in place and many people restricting their physical contact with others. You need to bear in mind that many courier services, such as Royal Mail, offering the opportunity to designate safe locations, from where customers can pick up their packages.

Retail is a tricky and turbulent business even at the best of times, with intense competition between businesses, and consumer expectations are changing all the time because of the rise of online retail. If you can’t meet these expectations, even in these special circumstances, your business will likely suffer as a result.

There are many other steps that you can take to brace yourself for the impending spike in customer demand. Nventree can help you manage inventory across multiple eCommerce platforms, allowing you to have an overview of what’s happening across all of your marketplaces. In these uncertain times, it’s important to have visibility and insight when it comes to running your online business.

Final thoughts

Neither retailers nor consumers know what to expect, but we’ve already seen that both have been very resilient in these uncertain times. There will unquestionably be big challenges this holiday season, but there are reasons to be optimistic that businesses and shoppers alike will always find ways of adapting and getting through it together.