Retail 101: Holiday Prep for Consumer Packaged Goods (GPGs)

CPG RETAILERS WILL NEED TO EFFECTIVELY MANAGE THEIR INVENTORY AND EXECUTION TO MAXIMIZE THEIR IMPACT THIS HOLIDAY SEASON. WITH SUPPLY CHAINS FACING HEADWINDS AND SIGNIFICANT SHIFTS IN CONSUMER BEHAVIOUR, HOW CAN RETAILERS ENSURE THEY BUILD RESILIENCE INTO THEIR LOGISTICS, FORECASTS, AND PERSONNEL PLANS?

CONCERN #1: Identifying the right inventory mix

The COVID pandemic has shifted consumer expectations, and expanded the variation in consumer preferences. Getting the right mix of inventory in-store and in the ‘endless aisle’ online is more critical now than ever.

Solution #1

IMMEDIATE

Identify the right mix of items: ‘cash cows,’ ‘best sellers’ and ‘gambles’, ensuring you segment your products appropriately and have a close pulse on trends in consumer behaviour.

SHORT-TERM

Plan contingencies for your ‘gambles’. For example, what will you do with excess or in case of delivery issues?

NEXT HOLIDAY SEASON

Build supply chain resilience by continuously tracking and mitigating risks for your ‘cash cows’ and ‘best sellers’.

CONCERN #2: Missed sales due to supply chain disruptions

Global supply chain disruptions, inaccurate forecasts and missed deliveries may result in a significant opportunity cost of missed sales. This is due to out-of-stock, overstock positions or reduced sales windows.

Solution #2

IMMEDIATE

Ensure the customer is informed of key holiday order dates/deadlines through multiple communication channels.

MID-TERM

Build your forecasts and orders to consider market trends, online/in-store variation, and ‘hot’ seasonal items.

NEXT HOLIDAY SEASON

Utilize a master planning calendar incorporating all key functional areas of the business and closely partnering with key vendors. Put special emphasis on building contingencies and resilience into the calendar where appropriate.

CONCERN #3: Execution risks due to personnel constraints

The ongoing “Great Resignation” and unused vacation time across various sectors pose risks to promotional execution including resourcing, merchandising, and vendor management.

Solution #3

IMMEDIATE

Conduct an HR risk assessment and consider retention strategies.

SHORT-TERM

Track and mitigate, particularly execution risks— working with key vendors if applicable. Ensure you have a business continuity plan addressing People, Processes and Technology.

NEXT HOLIDAY SEASON

Incorporate execution risk, service level agreements, and vendor scorecards into procurement plan.