Gaining a Supply Chain Edge

After the Party: The Effects of Holiday 2012 Shopping Season Represent Major Tipping Point For Retailers

Holiday 2012 will be one of those major events that we look back on later and realize how profoundly important it was to our future business strategies.

Retailers are learning much from the holiday 2012 shopping season, especially as reports on sales become clearer. In fact, a recent survey from the National Retail Federation’s digital division, shop.org, says that online retailers in particular are learning lessons from 2012 that they can use next year. The survey found that online retailers are focusing on inventory management, fulfillment, and customer service as a few of their major 2013 priorities.

However, brick-and-mortar retailers are seeing a different trend for 2013: Store closings. Forbes recently reported that store closings were up in the last part of 2012.

So what exactly did retailers do as the 2012 holiday peak season approached?

The big story was how companies reacted to Amazon and its customer-pleasing innovations. Companies tried to mimic these innovations, or react to them for a short time with limited price matching or other promotions in an attempt to get customers into the store.

They gave away free shipping, returns, and promotions without knowing what the result would be; or they allowed competitors to set their prices through price matching offers, which destroyed their own cost structure.

Store closings will only occur more often if companies continue on this path. I believe we will see more bankruptcies in 2013-2014 than in any other two-year period.

Without supply chain excellence and execution, as well as putting strategy before structure, my prediction will come true as customers turn elsewhere for the best price, selection, convenience and experience.

For the complete run-down on holiday 2012 and why it was such a major event, listen to this podcast or read the text transcript.

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