Five inventory strategies for retailers to win business this peak holiday season

Research shows that a lousy customer experience will deter 76 per cent of customers from returning to shop on your platform. So, it is critical to optimise service and customer experience online. 

The upcoming peak holiday retail season will place critical pressure on retailers’ back-end systems and networks as shoppers rush to snap up bargains and buy gifts for friends and families. At no time of the year is there more pressure on retailers to get the customer journey right. 

However, as AI-powered platform Blue Yonder’s Brett Egglestone, senior director – retail industry strategy, advises, it does not matter what time of the year it is: your customers always expect the same level of service. They trust your business to fulfil their purchases on time and in full – and for returns to be convenient.  

“Supply chain predictability is everything,” asserts Egglestone: “If you don’t have the systems to deliver inventory during peak trading periods, customers will go elsewhere, which puts their loyalty to the test.

“The consumer has only seen what supply chain disruption looks like in the last few years, but supply chain professionals have always been battling this in the background. However, with these challenges, there is a significant upside: Operating efficiently and intelligently can bring massive bottom-line benefits to a retailer, including predictive accuracy of demand, optimised labour, and reduction in wastage and clearances,” he continues. 

“In the intense retail environment, managing inventory effectively is the difference between delighting the customer at those peaks or missing out,” concludes Egglestone.

Blue Yonder turns your supply chain into a competitive advantage with end-to-end visibility and control across your entire ecosystem. The platform allows you to effectively plan, execute, and continuously and incrementally optimise supply, demand, and logistics. Such technology can be a lifesaver during the peak holiday retail season, turning browsers into buyers and then into satisfied customers who become unpaid advocates for your brand. 

While the best technology and systems help retailers easily manage peak season challenges, most legacy systems that retailers already have often struggle to provide the real-time visibility and dynamic flexibility needed. That’s why retailers need to adopt modern, scalable systems that offer a network-wide view of operations, which enables them to anticipate and respond to fluctuations in demand. 

Blue Yonder has identified five common challenges to cover in your peak season strategy… 

1.     Deliver an omnichannel experience

Data from Forbes shows that 73 per cent of consumers today expect a seamless and flexible customer journey when shopping and returning items – both online and offline. They want to research products online, compare prices, and even make purchases before heading to a physical store to try on or pick up their items. They may also prefer to discover a product in-store and complete the purchase online or through a mobile app. Delivering that experience requires robust integration across channels. 

Retailers must ensure product information, pricing, inventory levels, and returns processes are consistent across all platforms.

2.    Ensure inventory visibility and control

Real-time inventory visibility is critical in ensuring the most efficient fulfilment of orders, maximising conversion and shopping time before critical peak season sale cutoffs. With a real-time view of inventory data, order management systems enable you to meet consumer expectations by intelligently matching customer location data with inventory location, fulfilment costs and optimal routing, all within microseconds. That ensures you make the correct fulfilment and delivery decisions for every order.

Without such a real-time system, retailers lose sales due to products being out of stock, delivery delays or cancelled orders. Such events also erode customer trust and loyalty to your brand. Blue Yonder cites research showing that 40 per cent of shoppers who encounter an out-of-stock item will either shop elsewhere or not purchase at all. 

3.     Achieve optimal fulfilment efficiency

Blue Yonder’s research shows that 59 per cent of consumers expect to use online shopping for most of their holiday purchases – but 48 per cent of consumers fear delivery estimates might be unreliable. Furthermore, 56 per cent of abandoned carts are due to concerns about shipping and delivery, with customers worried that orders would not arrive fast enough. 

Blue Yonder advocates personalising delivery promises to customers by taking in all relevant factors around fulfilling an order rather than using generalised delivery windows. Combining the real-time view of what’s in stock, where and how long it will realistically take to deliver to the customer’s location turns a blanket policy into intelligent, personalised and credible delivery deadlines for each customer and item.

Using such technology allows a shopper to see their “get it by” date before they order (for example, order during the next 30 minutes to get it delivered by December 24). Such clear delivery messaging also drives urgency, encouraging customers to proceed to checkout and connecting the system to store inventory, which ensures that if customers want an item on the same day, you can show them the stock available in stores in their area.

4.     Manage returns effectively

As the last touchpoint with your brand, efficient returns are critical to customer satisfaction. An efficient returns management system is essential, especially during peak seasons, when retailers face the challenge of managing high order and return volumes without losing profit or inventory. Research shows that 94 per cent of customers would repurchase from the retailer if a returns process is easy. Furthermore, during the holiday season, 68 per cent of shoppers say they are more likely to check a retailer’s returns policy before they buy. In other words, they weigh up the return journey as a key part of their decision to shop with your brand before they even order.

Integrating returns processing into your inventory management is essential to staying efficient and avoiding logjams in warehouses and distribution centres. When retailers have a fully end-to-end view of inventory and returns, they can decide what to do with incoming products before they even reach the warehouse. High-value resalable stock can be returned to inventory, while damaged or less valuable goods can be directed for repair or liquidation. Furthermore, flags can be quickly raised for fraudulent returns with accounts tagged to prevent further incidents.

5.     Predict demand accurately 

Machine learning tools can optimise your inventory across your network, ensuring that you have sufficient stock to handle spikes in demand, no matter which channel the demand is coming from. With the cost of out-of-stocks estimated to be as high as 8 per cent of revenue, arranging inventory across warehouses and the store network is essential to minimise unfulfilled orders. 

Demand forecasting allows a retailer to fulfil orders from anywhere in its network – drawing on stock in stores to fulfil online orders, offering curbside pick-up or buy-online-pickup-in-store (Bopis) options, or seamlessly integrating micro-fulfilment centres. Having that flexibility ensures you can meet consumer demand at the most urgent moments – and spread the impact of demand spikes to prevent running out of stock in any single location.

Peak season: From reactive to proactive

Peak season is a make-or-break period for retailers. With heightened customer expectations and increased order volume, delivering exceptional experiences while maintaining efficiency is paramount. 

By embracing technology and intelligent systems, retailers can transform peak season from a period of chaos to one of opportunity. Proactive planning and execution, driven by data-driven insights, will help retailers meet customer expectations and build a stronger foundation for year-round success.

• Learn more about how Blue Yonder’s AI-powered solutions for retailers can help your retail business optimise customer experience and internal inventory efficiencies during the upcoming peak season – and beyond. Click here.

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