BY BEN AMES, SENIOR NEWS EDITOR
CONSUMERS MAY SEE JUNE AND JULY AS LAZY DAYS
for swimming pools and backyard barbecues, but for retailers,
it’s another story altogether. In the retail supply chain world, the
summer months are the critical period when retailers ramp up
for the peak holiday shopping season ahead.
In decades past, these preparations consumed the better part of
a year. To stock their shelves by Thanksgiving, merchants placed
orders with manufacturers many months beforehand, amassing
large quantities of stock to ensure they wouldn’t be caught empty-handed when shoppers came flooding into their stores.
Over the past decade or so, however, retailers have been moving away from the traditional practice and pushing their ordering out until later and later in the year. Although that might
sound risky, it’s actually smart business. By ordering later, they
can be more responsive to real-time demand and reduce their
risk of getting stuck with overstocks that eventually have to be
sold off at a discount, explains Dan Gilmore, chief marketing
officer at supply chain technology provider Softeon.
But now the pendulum may be swinging back again. Many
are questioning whether the delayed-ordering approach will still
be sound strategy in 2019, a year that has been roiled by market
forces such as hot e-commerce growth, tight trucking capacity,
a slowing economy, and tariff threats and trade wars. “There
are more uncertainties than you would normally find, and that
is causing some problems around how to manage peak-season
inventory flow,” Gilmore says.
DEALING WITH THE DELUGE
All this presents enormous challenges for retail supply chain
professionals. Even in the best of times, retail logistics leaders
often struggle to find space to house all the inventory their companies accumulate in advance of peak season, says Norm Saenz,
managing director at the supply chain consulting firm St. Onge
Co. “Now, the tariffs are scaring everybody, and that is having
major retailers thinking about scrambling to get their inventory
in sooner than usual”—a move that is only exacerbating the
space problem, he says.
In the face of these capacity constraints, retail distribution
As retailers prepare for the holiday shopping
season, new inventory strategies and real-time
data will be key to coping with the turbulent
market forces of 2019.