3 Tips for an Improved Holiday Supply Chain

With the holiday season accounting for 20 percent to 40 percent of a retailer's annual sales, the 26 days between Black Friday and Christmas this year are crucial. This is especially true for electronics retailers, which are hard-pressed to deliver the season's most anticipated devices, such as wearable technologies, smartphones and tablets.

Without having the right products at the right place at the right time, capturing peak spending is next to impossible. Therefore, the following supply chain guidelines are essential for retailers’ holiday success as well as building customer loyalty:

1. Have a dedicated supply chain strategy in place well in advance. Efficient supply chains are key competitive differentiators. Along with high-pressure, high-demand delivery and unpredictable stocking needs, the peak season's distinctive set of logistical circumstances requires a unique strategy. Creating a lean, agile supply chain for the holidays allows retailers to adapt to volatile swings in demand, deliver faster and guarantee product availability for any purchasing channel. Retailers should forecast and plan ahead for supply shortages, severe weather and expedited shipments, and work with supply chain service providers that help execute the plan.

Typically, holiday supply chain preparation begins in January when the product portfolio is set for the year. This means retailers should begin 2015 peak season planning as soon as the 2014 holidays wrap up. It's recommended that retailers start forecasting demand and working with manufacturers to strategize intake, stocking and returns preparation at least six months out. This particularly applies to mobile device and electronics retailers that rely on the timely delivery of many of their products from overseas. The challenge is that ports are notoriously crowded at this point in the season, so it's advisable to have the right visibility and flexibility in the supply chain. This will allow time to react to a slower port-intake process to either reroute the delivery of shipments or expedite them.

Adding to the need for a fine-tuned seasonal strategy, the West Coast longshoremen contracts have yet to be finalized. This could cause supply chain disruptions if a negotiation isn't reached soon. According to the National Retail Federation and Hackett Associates , a five-day work stoppage would reduce U.S. GDP by $1.9 billion a day.

2. Differentiate your marketing and product offerings. Family packages, rebates, return policy extensions, same- or next-day shipping and free shipping are just a few common worthwhile holiday deals. Retailers also shouldn't forget the importance of creating a holiday-centric in-store experience through the use of signage, pallet displays, endcaps and promotional packaging. Additionally, bundling products is an effective sales promotion for increasing unit sales volumes, enhancing product exposure to consumers who may not have otherwise purchased one of the products in the set, and taking advantage of new channel opportunities.

Bundling can present supply chain challenges, as it requires multiple manufacturers, logistics partners and the retailer to clearly and quickly communicate demand for each bundle. Therefore, retailers need to work with supply chain partners who are capable of repackaging products into bundles onsite to alleviate complexity for manufacturers and the retailer.

3. Invest in your returns process. An efficient returns process reduces frustration for both consumers and retailers alike. During the holidays, consumers rush to trade in "outdated" devices or return one gadget for a flashier model. With the right trade-in and recycling programs in place, retailers can salvage useful products and provide better service to retain customers. Meanwhile, customers are rewarded with a new purchase, cash or credit for the future. Everyone wins.

Adopting a device-recovery strategy is particularly useful for differentiating a retailer from competition, while better serving customers during the holidays. In the electronics industry, reverse logistics practices are invaluable since technology turns over at a rapid pace. Look for a supply chain partner that can handle all types of return situations, including recycling, triaging, repairing and reselling.

Though it comes with many twists and turns, it's no surprise that the holiday season is essential to retail. Careful supply chain preparation can help retailers smoothly navigate those obstacles to capture peak consumer spending and customer loyalty.

Alex Paskoff is the senior vice president, consumer division and strategic development, Ingram Micro Mobility, North America.