Exclusive Q&A: Preparing for post-Black Friday holiday success

Black Friday may have come and gone, but retailers still need to take steps to ensure their supply chains support holiday demand.

Chain Store Age recently spoke with Keith Jelinek, managing director in the retail practice at Berkeley Research Group (BRG), about the importance of retailers continuing to monitor, analyze, and adjust their supply chain operations throughout the entire holiday season.

How much of an overall threat does supply chain disruption pose to retailer holiday performance? 

For most retailers, supply chain disruption has a somewhat limited impact to overall holiday performance. Retailers have been making trade-offs over the past 90-120 days, whereby promotional discounts were limited on product in short supply, pushing higher margins.

We need to look at the holiday combining October-December. Many holiday sales were pulled ahead, by consumers wanting to get a jump start. Black Friday weekend sales were not a landslide, but we have three very strong weeks ahead. January is also going to be interesting, as many retailers have reported strong gift card sales, which will bring shoppers into stores post-holiday. 

What mitigating steps can retailers take on the inbound inventory side? 

There will be scattered holiday and winter wear shipments still arriving in time to make available in stores or online. The one mitigating step that retailers need to be mindful of, is the onslaught of holiday and winter products that will trickle in after the holidays.

Questions retailers need to consider: Will the product be made available at heavy discounts, can any of the product be packed and held to next year, and what is the impact to liquidity? Cash is king.

 What type of omnichannel capabilities should retailers have in place? 

 If you do not have efficient processes and systems available to support buy-online-pickup-in-store (BOPIS), ship-from-store or curbside delivery available, you had better revisit quickly and make the appropriate investments. All three of these omnichannel capabilities require precision when it comes to on hand inventory accuracy, make sure not to overlook.

The way store on hand inventory might have been managed in the past, is probably not going to work in the future. You will need an end-to-end process retooling. 

How can retailers prepare their stores to remain in stock despite delays? 

They need to focus on great customer service. Train employees how to handle disappointed and angry customers, offer to have it shipped to them from the distribution center or another store if available. Offer pre-orders, if you know the product is coming after the holidays, offer to sell it to them now, and ship it to them up upon arrival (again, you need to make sure that inventory accuracy is not overlooked).

Be careful in these next few weeks in regard to how much is allocated to stores versus maintained on line in the distribution center. Once the product is in the stores, it is difficult and expensive to return. Lastly, make sure to take a visual perspective – consolidate product on racks, remove empty circle racks and displays that give the impression of a ‘going out of business’ sale. 

How do you see the supply chain performing in the first half of 2022? 

Many of the factors started to materialize over 20 months ago. These include how production recovery was delayed, inventory was liquidated out of the supply chain in early 2020. Other factors include a lack of inventory of shipping containers and chassis and worker relocation and preference changes forcing scarcity of labor and higher wages. It is unlikely we will see any semblance of ‘normal’ until the back half of 2022.