Holiday Readiness 2021: Retailers Revisit Lessons Learned from Last Year

Barney Beal, Former Content Director

October 29, 2021

Pact wants to avoid the problems it saw last holiday season.

Last year wasn't all bad for the seller of clothing made from Fair Trade organic cotton, of course. Ecommerce sales soared as people who were quarantined at home turned to online channels they were skeptical of in the past. Additionally, the Whole Foods stores where Pact sells many of its products, were allowed to stay open, fueling sales.

The supply side, however, was another matter. Working with only a handful of Fair Trade-certified suppliers in India meant significant delays when global shipping ground to a halt.

“It definitely did impact our business,” said Drew Cook, Pact’s CFO. “We went through times when we didn’t have any product to sell to our customers.”

Unfortunately, a combination of factors indicate that this year’s holiday season could bring similar challenges.

“We expect it’s going to be the same this year, maybe even worse,” said Allison Auclair, vice president of product management for NetSuite SuiteCommerce. “There’s a new normal we’ve kind of figured out how to operate in. But the country’s third-largest shipping port has been shut own since Aug. 11. Another port was closed prior to that. There are still lingering effects to that Suez Canal event. It’s a set of dominoes for this year.”

Getting a Jump on Holiday Shopping

Traditionally, retailers begin planning for the holiday season around August, but this year that preparation is more important than ever — many probably should have started earlier. This year, Cyber Monday may not be on Cyber Monday.

“We think people might be doing shopping earlier, so you may not see that spike,” Cook said.

In addition to the shipping hurdles Auclair mentioned, consider:

  • Brick and mortar retailers who were forced into ecommerce last year remain, adding to the online competition.
  • Consumers also flocked to online channels and while they may have been understanding of delays and price hikes during the height of the pandemic, they’re not likely to be as patient this time around.
  • Last year demonstrated the importance of being able to support flexible fulfillment such as pickup in store, curbside pickup, buy online return in-store. That need is likely to continue.

Order fulfillment(opens in new tab) is actually becoming just as big a problem as the supply chain for some.

“We have an internal group that’s solely focused on this; they’re having constant discussions with factories and freight forwarders,” said June Jacobs, associate director planning, merchandise and analytics, at xChair, a provider of office and gaming chairs. “It is pretty hairy out there right now.”

Adapt to Survive

Despite the expected difficulties, retailers can not only survive this season, but some can thrive. According to Auclair, it’s key to have a plan going into the season, but companies also need to be ready to adapt if those plans change.

“You could do omnichannel fulfillment in a way that is manual, but we know store inventory is very fluid so there will be exceptions you need to manage,” she said. “Having visibility, having rules about how you want to fulfill is vital.”

Retailers that ship online orders directly from retails stores or offer the next best fulfillment option need automation and make sure it gets out to the customer as fast as possible. They also need to be ready to adapt.  For example, as shipping costs rise, retailers need to not only evaluate price changes, but how they’re going to proactively communicate those changes to customers. That requires vigilance, particularly when managing inventory.

“We can’t look at the month of November or even a week. People need to have a track on this daily so that they can understand the trends and are able to make the shifts before it’s too late,” Abby Jenkins, product marketing manager for NetSuite, said in a recent 7-minute workshop on meeting customers where they are this holiday season(opens in new tab).

A system like NetSuite makes that possible by housing data on customers, financials and fulfillment KPIs(opens in new tab) all together.

“With NetSuite, it’s really easy to configure and turn things on and off so you can adjust,” Auclair said. “If, in the middle of all this, stores shut down again and you need to do curbside pickup or ship from store, it gives you a different level of agility. But you need to understand it now, because it takes a little time to understand it and get it ready.”

Finding the Right Levers

It takes more than having a system like NetSuite, however. Retailers need to identify the right levers at their disposal.

“Because we had shortages and we didn’t know how customers were going to behave, we tried to be cautious with expectations for that Black Friday through the week before Christmas,” Pact’s Cook said, referencing last year’s holiday season. “We pulled back on digital marketing and didn’t go as deep on discounts.”

Pact relied on NetSuite’s inventory management(opens in new tab) capabilities to get a real-time understanding of availability and used that data to inform pricing.

“If you don’ have enough products to sell, you really need to make sure you nail it with sufficient margin on the other products to make up for it,” he said. “We did our best to take info we have today to make the best decisions possible.”

xChair also keeps a close eye on inventory since its 60-pound chairs are an expensive item to ship and only getting more expensive as forwarders raise prices. The company keeps between 4 to 12 weeks of supply on hand and closely follows marketing spend to forecast sales.

“The discounts, door busters we need to do, that is then easy,” Jacobs said. “What is incredibly difficult is the supply chain.”

For Jacobs, the approach has been constant vigilance, looking at inventory, sales and new opportunities. The company did find some new freight forwarders thanks to relationships with its manufacturing partners but, Jacobs noted, looking for new shipping companies usually means getting stuck at the end of the line because those businesses are focused on existing customers first.

Retailers that scrambled to adapt last year, with some success, are finding that their work is not over, and likely won’t be through the holiday season.

“At the end of 2020, we started making decisions on 2021,” Cook said. “We increased the buffer for our factories and they’ve done a terrific job getting caught back up. But we have several containers of product sitting in factories right now. You don’t want to assume anything happening right now is the new normal, but you do want to take half steps so you’re not over your skis either.”

For more tip and guidance download the business guide on inventory management hacks for the holiday season(opens in new tab).

NetSuite has packaged the experience gained from tens of thousands of worldwide deployments over two decades into a set of leading practices that pave a clear path to success and are proven to deliver rapid business value. With NetSuite, you go live in a predictable timeframe — smart, stepped implementations begin with sales and span the entire customer lifecycle, so there's continuity from sales to services to support.