Nothing about 2020 was normal — in fact, for many retailers, the phrase ‘hindsight is 2020’ is one they should reconsider using.
However, in the midst of all the challenges the year brought, the retail trends we saw last holiday season won’t just be a change in what’s been a norm — instead, they’ll be an acceleration of the shopping shift we’ve seen over the last decade. Despite the economic downturn, holiday sales were up 8.3%, according to the National Retail Federation (NRF). Even more impressively, online and non-store sales were up 23.9%, to $209 billion. Shoppers were ready to purchase last Christmas, and they took advantage of safe virtual options.
But what does this mean for 2021? Typically we could count on this data to guide us as we plan for the next holiday season. However, with customers avoiding large crowds such as those typically found on Black Friday, we can’t yet know that shopping conditions will be the same this November/December. That uncertainty will cause some challenges for retailers as they look to demand planning.
The answer: savvy businesses should capitalize on the data they gathered as they begin planning for Q4 2021 — but also ensure they’re pulling in data from across the organization for the most complete picture possible.
Location, Location, Location
While many customers will have purchases shipped directly to their homes this year, brick-and-mortar stores have rolled out their own solutions that may impact the way we approach the 2021 holidays. Research conducted a few months into the pandemic by Digital Commerce 360 found that 121 of the top 500 retailers now offer buy online, pick up in/at store (BOPIS) options.
Tracking location data along with customer data can help stores better prepare for 2021. A company’s sales trends are important, but understanding which stores drove what types of sales allows for more targeted preparations. For instance, trends in store-specific location data throughout the day or week can also help businesses adjust and move product through the supply chain more efficiently.
With near live views of demand, businesses are better able to understand what products are more likely to sell out and when — and are less reliant on big-picture holiday season data. If they are properly sharing this data across their supply chain, they can keep distribution centers informed of possible sales spikes throughout November and December — ensuring trucks are carrying the right amount of product to the right store, at the right time.
Re-evaluating Supplier Data
What retailers experienced last year is sometimes referred to as a “supply shock” — an unforeseen event changes everything about a product, from its availability to its pricing and potential competition. Grocers, faced last year with a change in how consumers will celebrate the holidays, will likely see the most whiplash come Q4 2021, as demand for products like disinfectant wipes and paper towels drop back to normal levels, leaving extra product on the shelf. But more durable goods are also likely to see an abrupt change in sales.
Take luggage for example. As COVID-19 travel restrictions kept people off the road and out of the air, the industry felt an enormous crunch — in fact, sales of luggage dropped 80%, with Samsonite alone facing nearly $1 billion in losses. However, with the recent announcement that there would be enough vaccines for every American adult by the end of May 2021, travel is likely to resume in later 2021/early 2022 — pointing to a possible increase in demand come the holiday season.
As big box and department stores look to what items they’ll need to stock more of, and which items to offer discounts on, having visibility into how many and what types of luggage suppliers such as Samsonite can deliver is critical. Supplier data can help retailers understand whether their partners are ramping up production or keeping things slowed down — and ultimately whether to expect a regular holiday season, slower sales or a spike in purchases for a particular item.
A Solid Foundation of Data for a Solid Holiday Season
Unfortunately, raw sales data alone won’t help us predict what’s coming in 2021 — so gathering as much information as possible from other sources will be critical during the holiday planning process. Additionally, being able to adapt new practices and adopt to changes will be critical.
For retailers, that requires a mix of customer data (what products saw sales spikes in 2020, and will they still be relevant in 2021?), location data (how are options like BOPIS holding up at each individual location as life begins returning to normal?) and supplier data (how do my partners see demand for their product this year, and can they deliver the inventory I need?).
If these sources of data are locked up in disparate systems, however, building a clean view of the upcoming holiday season and ensuring integrity of data can be a difficult task. That’s where master data management (MDM) comes in. MDM solutions help retailers gain a single version of the truth — all of their sources of business information accessed through one system that’s easier to keep up-to-date and shared across the enterprise. MDM allows retailers to see that customer, location and supplier data side-by-side-by-side, discover potential trends as they form and make informed decisions about holiday season planning.
Now’s the time to start planning for your Q4. As you look to make sense of last year’s data and what it means for 2021, don’t forget that the answer won’t be found through one source of data. And if you’re already plugged in to your customer, location and supplier data, consider how an MDM solution might give you the clean, streamlined view you need to tackle this “new normal” with confidence.
Doug Kimball is VP of Global Industry and Solution Strategy for Stibo Systems