As the holiday shopping season approaches, retailers face a complex set of challenges, balancing economic pressures with evolving consumer behaviors. Bruce Herbert, Strategic Advisor at TMX Transform, offers five strategies to make the most of the peak season.
Interest rates are exerting significant pressure on consumer spending. As a result, shoppers are expected to prioritize discounted items and leverage early sales events like Black Friday.
The latest data from Australia Post’s Inside Australian Online Shopping Report revealed an additional 190,000 households participated in Afterpay Day this year, compared to last year. Additionally, the report predicts that Major and Discount Stores will see the biggest jump in sales across the cyber sales period, up to 142% when compared to normal trading days in the year.
Regardless of what this holiday season looks like, the retail sector is diverse, and different segments will experience vastly different outcomes. Therefore, in supply chain management, it’s crucial to be prepared for multiple scenarios.
Here are five supply chain strategies leading organizations are using to make the most of holiday season purchases.
1. Building in Cost Flexibility
Supply chain resilience isn't just about overcoming disruptions but building cost flexibility to handle both upturns and downturns.
Some businesses experience ‘reverse synergy’, where a 50% volume increase leads to a 300% cost surge due to poor operational understanding.
True resilience allows for cost flexibility, managing high volumes without exploding costs and reducing costs when volumes drop, protecting margins in all scenarios.
2. Demand Forecasting
Advanced data systems have widened the gap between companies using outdated methods and those with cutting-edge forecasting tools.
Today’s systems use multiple algorithms to adapt to different demand drivers, providing nuanced accuracy across product categories and seasons.
While progress isn't universal, the biggest gains come from investments in both technology and organizational capabilities to fully leverage these systems.
3. A Sense of Urgency
Forecasting is only the start—success during peak seasons comes from agility. As supply chains operate at full capacity, minor issues can escalate quickly.
Like a traffic jam during rush hour, small problems can become major disruptions if not addressed immediately.
Constant monitoring and rapid response distinguish top-performing operations, which simulate and practice responses to avoid escalation under pressure.
4. Leadership Under Pressure
Sustaining performance during peak periods requires strong leadership to support staff, especially amid labor shortages.
Effective leaders prepare teams in advance, encourage time off before peak season, and address signs of overwork early. They take a proactive approach to ensure well-being and sustained high performance.
5. Mastering Peak Season Rhythm
Peak seasons should be integral to business planning, not exceptions. A sound business plan must separate strategies for off-peak, peak, and transitional periods.
Preparing for peak season is critical—much like rehearsing for a major event. An industry veteran in the beverage sector aptly described this approach as: "We rehearse for 11 months of the year, with Christmas as our main event."
Off-peak times are ideal for maintenance and building organizational "fitness" for the challenges ahead.
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