In the world of retail and online sales, it is common that sales significantly increase over the holidays. The majority of online retailers have a significant seasonality around Christmas. Businesses typically generate over 40% of their annual revenue only during the final two to three months of the year, which is why inventory planning becomes crucial.
This presents a considerable challenge for the shipping, customer support, and purchase order operations.However, businesses have tried to implement long workdays and various incentive to employess to tackle some of these challenges Unfortunately, despite attempts, there are circumstances in which firms face stockouts (they ran out of a specific item and can no longer meet demand). This results in lower profitability and lost sales. On the other hand, the warehouse is stuffed with possible out-of-stock items that nobody will buy during this period and remain in the inventory until January.
How to Plan Inventory During the Peak Season?
Before Christmas, there must be extensive planning on the part of retailers and eCommerce businesses. Often retailers experience a magnitude of problems with inventory planning during the holiday season. This results from supply chain issues, including a limited supply of materials and long lead times from suppliers. Managing this inventory can be made simpler with a dependable inventory planning system that can predcit demand & automate replenishment
Here are a few tips & tricks mentioned below to help you get through this season:
1. Check Last Year’s Data
Using actual data when creating your sales estimate is important rather than making guesses and assumptions. You’ll make better decisions about which products to stock up on if you have specific information from your own sales history.
It’s crucial to focus exclusively on the statistics from the holiday shopping season of the previous year rather than the entire year. During the holidays, customers shop differently, and the goods they purchase as gifts sometimes correspond to those they purchase for themselves.
Obviously, your sales will vary from year to year, but your data gives you the ideal place to start when making the rest of your projections.
2. Prepare Sales Forecast for Christmas
The fastest way to comprehend your previous sales is through sales forecasting. You can use the detected attributes, such as seasonality, trend, Christmas patterns, etc., in your future planning.
3. Inform your Suppliers
It’s crucial to inform your suppliers and merchants in advance due to the considerable spike in demand throughout the Christmas season. Provide details on anticipated order volume to ensure that you order enough to prevent stockouts. They require time, just like you, to complete orders.
4. Conduct a Test to Determine Your Best-Selling Items
Many people have experience determining which products are most popular, but checking an item sales report will help you confirm what you already know. To maximize sales this year, ensure you have plenty of inventory by identifying the most well-liked items from the previous year. To swiftly refill an item when it becomes short on stock, you may also enable inventory alerts through your inventory planning system.
5. Set Stock Levels
Your company will be better positioned to handle the additional demand during busy shopping seasons if inventory is carefully planned. There are simple strategies to ensure your inventory stays above that level once you know what you will need over the holiday season.
Tracking stock levels and automatically setting reorder notification points is useful if you work with tech-enabled inventory planning software. You should raise your reorder points and quantity during the holiday season to account for increased sales.
6. Synchronize Your Storage Locations and Channels
Consolidating your channels, storage locations, and in-transit deliveries is one of the most challenging aspects of inventory planning, regardless of the time of year.
Consider using inventory planning software that integrates your sales channels, warehouses, and orders into one main online dashboard to simplify life. With just a few clicks, you can access any inventory data, and the software automatically updates your product pages across all channels with stock levels. Hence, you never run the danger of overselling.
7. Stock Up Early
Last but not least, you should order and reorder your goods early enough to ensure that the goods are stocked in time. Another necessary justification for taking care of your Christmas inventory requirements early is to prevent needless delays or lost revenue.
Your sales prediction determines how much you should reorder. Thus, it’s essential to use reliable data. However, consider including a little cushion if your success exceeds your expectations. Having too much won’t cost you a sale. Therefore, it’s better to err on the side of too much than too little.
8. Promotion Planning
Promoting products increases consumer demand for retailers. A good demand planning software should be able to plan promotions for a product or service while leveraging marketing tools, resources, and methods. Retail businesses can adjust in real-time to maximize returns and gain knowledge of ongoing trade promotions.
About the Company
By combining historical sales data with additional factors like seasonality, customer trends, and others, Kronoscope, a robust inventory planning tool powered by AI from Fountain9, enables organizations to make precise estimates. Businesses can stock their inventory optimally while considering the forecasted demand for the upcoming holiday period, thus reducing the complexity of managing extensive inventories. The software can precisely forecast demand for each SKU item and determine the quantities that need to be stocked to fulfill demand adequately.
Kronoscope also prevents overstocking by proactively identifying SKUs that are at the risk of getting piled up at various levels in the supply chain. It can Identify SKUs ideal for liquidation by proactively monitoring SKUs piling up (getting overstocked) at any level in the supply chain and helps avoid wasted procurement/replenishment time, unnecessary expenses, and opportunity costs. Businesses can meet customer expectations and generate more substantial money with the help of this software.