Black Friday. For every retailer, the day when sales can increase by a factor of 7 or more. But at the same time a huge supply chain challenge.
Due to the enormous challenges posed by Black Friday, more and more smaller retailers are dropping out. Main reason are the high costs, often forced No-sales and the huge burden on staff. Below are some strategies you can follow to avoid the problems mentioned above.
Many things about supply chain challenges, are about timeliness. And starting your preparation on time is one of them. Analyze your last Black Friday right after the holidays. Look for trends, do market analysis, supplier performance, customer buying behavior and whether your purchasing and inventory strategy matched customer demand. Use this information at the end of the 1st quarter already to plan your next Black Friday. Those who start early have plenty of time to build scenarios for the disruptions that may occur.
When do which goods arrive and are they the right goods. Understanding your supply chain is essential. Don’t rely solely on your supplier’s information for that. Real-time data from your carriers is crucial here. They can often also predict in a timely manner if there is a disruption in delivery. So invest in real-time, data-driven solutions.
Increased inflation, associated cost increases and the uncertainty of international delivery [shipping] has made many retailers cautious. Look for strategic agreements with your suppliers to avoid price fluctuations. Long-term agreements are part of this. Order on time. Also buy transport capacity in time. There are many hijackers on the coast and waiting too long means higher prices.
Demand forecasting is tricky by itself. For Black Friday it’s even trickier. Not only because of demand. Often manufacturers introduce new models during these periods. So there is no historical data available to base your forecast on.
This also creates problems when you want to build what stock. Not infrequently, capital gets tied up in inventory that is already stored, but has no demand yet. That also creates a problem in terms of storage. Your warehouse is full of not-moving stock until Black Friday.
Due to uncertainty of supply, instability of certain regions, it is wise policy to diversify your sourcing. In doing so, also look at the flexibility of your suppliers. Can they quickly scale up or switch to other production? Then also ensure good and constant communication with your suppliers. You want to know on an ongoing basis how your orders are doing.
Having a proactive attitude and starting to set up your supply chain in time for Black Friday is essential. You will then have time to make arrangements, avoid unnecessary costs and calculate different scenarios and then make a clear plan for the entire organization.