With Black Friday, Cyber Monday (BFCM) weekend sales expected to hit almost £10billion, Stuart Greenfield, European Sales Director at Advanced Supply Chain, looks at three hotspots for preparing supply chains to cope with an intense surge in sales.
Optimism, opportunity and challenges
A new report from VoucherCodes forecasts that UK consumers will spend up to a total of £9.52billion across this year’s BFCM weekend. Data is based on a survey of 2,000 nationally representative adults and suggests a 4.2% year-on-year uplift in sales.
Data from the Nationwide building society seems to confirm a BFCM boost, with predictions of more than 12million transactions being made on the first day of the Black Friday sales weekend. This marks a 10% increase on last year.
A spike in sales is welcome news for the retail industry and could trigger a loosening of consumers’ purse strings for the all-important Golden Quarter. There’s opportunity for retailers to sell high volumes of goods, with a fast turnover of stock requiring preparation in three supply-chain-critical hotspots.
1) Being ‘retail ready’
A lot of conversations about preparing for peak will start with volumes and timings. Retailers and consumer brands want to know they will have sufficient stock inventory to avoid out-of-stock situations. However, this approach can fail to appreciate an underlying issue of stock readiness – a growing problem following trends of supply chain diversification and expansion.
Recent years have seen retailers spread risk by increasing sources of supply and broadening product ranges. Although this can help protect against supply shocks and boost sales, it can also mean a greater volume of SKUs are arriving at warehouses and fulfilment centres from different suppliers in varying formats. Product packaging and labelling often require work to ensure consistency and compliance with retailers’ brands and systems to ensure goods are in a saleable format. Extra work can quickly cause supply chain bottlenecks, needlessly consume valuable staff time and lead to errors and problems with quality control.
The full impact of these types of issues is often underreported because of manual processes during the pre-retail stages of supply chains. Automating and digitalising labelling using mobile kiosks can help to enhance packaging and labelling compliance and streamline the speed-to-market of goods. Perfecting ‘retail-ready’ stock can save crucial time that’s vital during peak.
2) Ensuring end-to-end visibility
Accessible, accurate data is essential for keeping supply chains moving on time and on budget. End-to-end visibility, from sourcing to point of sale, and back again – don’t forget reverse logistics – can provide a control tower view of stock inventory. Data-driven decisions can be made to optimise warehousing and fulfilment processes, to identify and address errors, reduce wastage, enhance fleet scheduling and boost stock control efficiencies and effectiveness.
During peak season, reliable data and full supply chain visibility become even more important. Information can be used to create supply and demand models, as well as contingency plans, which better prepare stock inventory management for sales spikes. It’s often beneficial to audit the accuracy of data ahead of peak and to continue to test accuracy throughout the season, paying particular attention to communication across different sales channels to ensure all platforms are talking to one another. It’s also useful to question connectivity to check whether key points of operation are creating and reporting data. Manual processes can cause a disconnect, leading to data inaccuracies.
3) Optimising returns quality control
Deep discounting and time-limited promotions will often trigger an increase in impulse purchasing, meaning peak is a busy time for items being sent back to retailers and consumer brands. Optimising quality control of returns during this busy period is important for two key reasons. The first is to reduce the returns void and the second is to minimise the risk of returns fraud.
The returns void refers to the lag between a customer sending an item back and when that item is available for recirculation, either via the original sales channel or another platform. Getting returned items quickly back into the sales cycle becomes even more important during BFCM events, when there’s a limited – and competitive time – to engage shoppers. Deliberation during quality control can contribute days and weeks to the returns void and can be avoided by creating clearly defined salvage rates to enhance product inspections and restoration processes.
Returns fraud appears to be a growing problem – and one we’re working to address with our sister company ReBound. Not-for-profit fraud prevention service Cifas reported earlier this year that 35% of 16–24-year-olds admit they’d be willing to lie to get a refund. Such behaviour can include disingenuous returns, where people will aim to deliberately defraud the returns processes. We’ve seen examples of old shoes being sent back in place of expensive trainers, as well as ongoing issues of extreme wardrobing and other switched items.
Returns fraudsters know peak is a busy time that places retail processes under significant time and volume pressures, and they look to exploit this. Sophisticated software and robust product inspection processes can help to optimise quality control of returns. Inspections can be carried out quickly and effectively to combat fraud, while delivering the assurances required to confidently authorise genuine refunds in a timely manner.
To find out more about optimising supply chain hot spots for peak season, visit www.advancedsupplychain.com or email [email protected]
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