Holiday Inventory Preparation: 10 Best Practices


Holiday Inventory Preparation: 10 Best Practices

Too early to start thinking about the holidays? If you’re in the eCommerce business, the answer is an emphatic “No!” .

Too early to start thinking about the holidays?

If you’re in the eCommerce business, the answer is an emphatic “No!” While most people are thinking about the summer, based on trends and data, the time for preparation is now. Online shopping in 2020 took everyone by surprise and experts are predicting that trend to continue.

A retail report by CNBC indicated that US online shopping during the 2020 holidays grew by a whopping 32.2% from the previous year with total sales amounting to $188.2 billion. It also states that eCommerce sales during November, including Black Friday and Cyber Monday, reached $100 billion for the first time. According to an Adobe Analytics report published on CNBC, 2020’s Cyber Monday sales reached $10.8 billion, making it the biggest US eCommerce day ever. It was a surge of 15.1% year over year.

As online purchases grew at a significant rate, in-store purchases at brick-and-mortar locations saw significantly reduced traffic across a diverse range of products. RetailNext, which provides cameras, software, and analytics to retailers, reported traffic dropped by 40.9% on the final Saturday before Christmas. However, this decrease in store traffic is less than the 48% drop in traffic on Black Friday compared to the previous year.

Projections for 2021 by eMarketer show that online shopping will continue to grow, and eCommerce brands should be preparing for peak planning now. Does the memory of sales surging still live in your mind? How are you preparing for peak season to manage your inventory and fulfillment?

Following are ten best practices that will help you to prepare for the holiday season:

Mark The Dates On The Calendar

It sounds basic, but know the important dates and share with your entire team. All departments need to prepare and be in sync. Marketing campaigns, inventory scheduling and supplies, and shipping and logistics should all be aligned well before order fulfillment can work like a well-oiled machine.

The important dates in 2021 are:

  • Thanksgiving: November 25
  • Black Friday: November 26
  • Cyber Monday: November 29

It may seem obvious, but if your team isn’t in sync with these dates, balls may be dropped.

Demand Forecasting

Inventory should be planned efficiently for the holidays in advance which requires accurate demand planning and forecasting. Utilize industry trends, previous year over year and month over month for projections. You need to have a number to prepare for so suppliers know your needs in advance. Correct demand predictions coupled with the adjustment of reordering quantities is a crucial step of success during the holiday season.

Align Marketing Activities With Demand Forecast

When you are planning for the holiday season’s surge in demand, align your marketing and advertising efforts with your supply chain. Which products to be promoted requires careful planning based on data, previous year trends, and the current demand. Marketing and product advertising should be in tandem with stock levels and turnover rates. Keeping this in mind leads to efficient inventory management.

Ensure Your Suppliers Are Ready

Once you forecast your demand, align your marketing activities, and have inventory projections, your suppliers need to be ready, too. Factors like holiday down time, capacity, and labor can impact your suppliers’ ability to service you. Work with them closely taking into consideration lead times and product availability. Having a schedule in place that includes replenishment will be invaluable for execution.

Plan For Return Management

The major surge in eCommerce activities will most likely lead to a considerable increase in returns, posing a real challenge for businesses of all sizes. Your efficiency in managing returns can become key to your success this year. Salesforce projected $330 billion in global online purchases to be returned after the 2020 holiday season, which represents 30% of total purchases. A smooth and seamless return process for customers increases brand loyalty and repeat business.

Order Holiday Packaging In Advance

Holidays are the time to have fun and enjoy. You can play a role in that for your customers by temporarily changing your packaging to delight your customers. Make sure you plan ahead – like every other area, the closer the holidays are, the more difficult it will be to execute.

Efficient Inventory Management

Technological inventory management is critical, whether you run a single-channel or omnichannel business. Implement a professional inventory management system so the updates are automated, and you can run your business efficiently. Running out of inventory impacts revenue and too much inventory on hand impedes cash flow. For a high-level of order management and to cover sales surges, you should increase reorder points [ROP] and reorder quantity.

Inventory Audit

Despite getting a professional inventory management system in place, running a regular audit of the inventory during the holiday season adds an additional layer of accuracy. It ensures a hassle-free and seamless order fulfillment system so you can focus on your product.

Efficient Customer Service

Customer service is the linchpin of any organization and becomes even more critical during the holiday season. One unhappy customer can spread a negative message with a wide reach that can impact your reputation. Optimizing every aspect of your order fulfillment process will ensure that you meet and exceed your customer expectations.

Speed Up Shipping With A 3PL

The smartest decision to tackle the holiday rush is to hire a Third-Party Logistics [3PL] partner for professional and efficient order fulfillment. An excellent 3PL partner will manage all the aspects of logistics including warehousing, packing, and shipping so you can focus on production and sales.

Following are a few key factors to consider when partnering with a 3PL:

  • Ensure that they understand your business objectives
  • Check if they have the required technological infrastructure to support the holiday rush and the ability to provide you with data and reports if you need to pivot.
  • Evaluate their return management system.

Inventory preparation for the holiday season is one of the most crucial tasks for an eCommerce brand. Plan carefully and hire an efficient 3PL who shares your vision and passion, and is obsessed with your customers like you are.