Retailers look set to reap the rewards of a Black Friday, Cyber Monday (BFCM) sales spikes, but amidst the optimism there are often concerns about how stock inventory management will cope. Stuart Greenfield, European sales director at Advanced Supply Chain, looks at three hotspots for peak-proofing supply chains.
BFCM sales spike
Various reports and forecasts suggest a bumper BFCM weekend for retailers and consumer brands. VoucherCodes predicts UK consumers will spend up to a total of £9.52billion across this year’s BFCM weekend, representing a 4.2 per cent year-on-year uplift in sales. Data from the Nationwide building society estimates more than 12million transactions will be made on the first day of this year’s Black Friday sales weekend. This would mark a 10 per cent increase on 2024.
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’
Stock inventory management must prioritise the retail readiness of products. This has become a growing challenge, following trends of supply chain diversification and expansion.
Recent years have seen retailers spread risk by increasing sources of supply and broadening product ranges – shrewd moves that can protect against supply shocks and boost sales. However, this means a greater volume of SKUs are arriving at warehouses and fulfilment centres from different suppliers in varying formats. Product packaging and labelling often requires 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 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
Reliable data and full supply chain visibility becomes even more important during peak. Information can be used to create supply and demand models, as well as contingency plans, which better prepares stock inventory management for sales spikes.
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.
It’s often beneficial to audit the accuracy of supply chain 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. Retailers may want to question connectivity throughout supply chains 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
BFCM and other peak season sales events will often encourage an increase in impulse purchasing, meaning the Golden Quarter is also a busy time for items being sent back to retailers and consumer brands. Spikes in returns must be dealt with efficiently to reduce the returns void and to minimise the risks of returns fraud. Optimising quality control during reverse logistics is imperative.
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 per cent 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 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 for retailers and they will often aim 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 enquiries@advancedsupplychain.com
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