Responsiveness is the key to a happy holidays for retailers

As we gear up for the festive season, our minds naturally turn to holiday plans. But, for retailers, there’s more to think about than usual this year.

There’s no doubt it’s a challenging retail landscape right now. We don’t need any more reminders just what an uncertain world we’re living in. And consumers are grappling with that uncertainty just as much as businesses.

Consumers’ creative pragmatism

Unsurprisingly, it’s having an impact on spending and shopping behaviors. According to Accenture’s 17th Annual Holiday Shopping Survey , financial pressures are leading people to cut back on some holiday purchases, such as festive decorations.

But there are encouraging signs too. The survey shows that shoppers are also being creatively pragmatic about their spending. They’re focusing on buying quality products. Or thinking ahead with gifts the family can enjoy all year around.

It also seems the traditional “fourth quarter” holiday shopping period is back with a vengeance, with around two in three consumers saying they won’t do their festive buying until October earliest. That’s a reversal of the elongated season we’ve seen in recent years.

Rapid response retail

Retailers are feeling the pinch too, of course. The need to ensure profitability is front of mind across the industry. But this shouldn’t come at the expense of customer experiences.

Retailers need to work extra hard in times like these to stay customer obsessed and “show the love”. That means tracking and responding quickly to constant changes in consumer sentiment.

The challenge is that this puts a lot of pressure on retailers’ operational agility and responsiveness. It makes fast and accurate demand forecasting even more essential than it already was. Adaptability, agility and the ability to pivot quickly in response to sudden shifts in demand are now core capabilities.

Those that can best leverage technology and analytics to forecast that demand, manage inventory efficiently, and work with suppliers to adapt and optimize supply chains will be best placed to thrive.

Keeping the holiday shelves stacked

Store inventory is a great example. Let’s not forget how important store experiences are to the holiday season. Who doesn’t still get a thrill seeing shelves packed to the rafters with festive products? It’s such a big part of the holiday experience.

But it puts even more emphasis on having accurate demand forecasting and agile inventory replenishment both at the macro level and at the store level.

Get it wrong, and retailers can find themselves with sad-looking stores full of empty shelves… or sitting on a glut of wasted stock.

An example? My friends in the UK tell me they’ve had a spell of unusually nice weather this Fall. That’s great for them. But not so much for the grocery retailers that went early with festive product lines.

They found themselves with a big surplus of unsold holiday produce. And stock outs in many ‘warm weather’ products like drinks and dips that were suddenly in demand.

Data is the driver

Of course, the point is not that retailers can start predicting the weather weeks ahead with pinpoint accuracy. AI isn’t that smart… yet.

But having the data and analytics maturity to sense change as it happens, coupled with a supply chain that can pivot quickly when it needs to, is an incredibly powerful capability — especially in times of uncertainty.

Look at Accenture’s new strategic partnership with RELEX Solutions , for instance. It means we can offer some really exciting retail solutions in the forecasting, replenishment, supply chain planning, space planning, pricing and promotion planning space, empowering retailers to find the responsiveness and agility that consumers expect while minimizing waste.

A “back to basics” traditional holiday

But what about the big picture? Given everything that’s going on right now, I think we’re in for a holiday season centered around human connections and traditional experiences.

It’s going to be about enjoying the nostalgia of past memories, and creating new ones. Retail has a big role in that of course — especially when it comes to the experience of holiday shopping in the local store.

But I also think there’s a lot of appetite for simply spending time together and enjoying each other’s company. For me, that means celebrations centered around family and food. My kids will all be coming back for the holiday this year, and connecting around the festive table has always been at the heart of our family traditions.

We even have a rule that smartphones are left outside the room! Yes, the kids grumble about it at first. But they know it’s those human connections that are such an important part of what makes this season special.

I think retailers that understand and act on these desires for a human holiday will have a lot of success in creating a deeper connection with consumers and building brand loyalty.

Whatever the season holds for you, I wish you a happy, safe and prosperous holiday.