OSA: Insights for Retail Success During the Festive Season:

Following our recent OSA working group meeting, Professor Daniel Corsten shared his takeaways from this well attended (41 retailers / CPG's) online meeting and the key insights on the challenges and strategies crucial for retail success during the festive season with Colin Peacock. Here are some of the key themes:

Importance of Execution and Discipline

Execution and meticulous planning remain key themes when it comes to how retailers plan for the holiday season. Daniel pointed out that, despite technological advancements, the bedrock of successful festive retailing remains rooted in these fundamental principles. A focus on delivering the essentials well, rather than an overreliance on complex tech solutions, emerged as a key theme.

Empowering Store Managers:

A common theme shared by all the retailers was the high degree of autonomy given to store managers over this festive period, on both the assortment and on the planning of the retail shop floor. This strategy allows for more localised, customer-centric merchandising however, there was also a recognition that it can bring extra complexity in planning and inventory management. The balance between autonomy and operational efficiency was a focal point of the discussion.

Daily Coordination and Communication:

As Christmas nears, the need for intensified daily coordination in retail operations becomes critical. Retailers reported shifting their planning and communication from a weekly to a daily schedule, a strategy likened to 'air traffic control' for its precision and necessity. This heightened level of coordination is vital for managing the festive rush effectively.

Post-Holiday Strategy:

The transition back to standard operations after Christmas involves strategic markdowns and a reassessment of inventory. This phase is crucial for ensuring a smooth shift out of the holiday mode, balancing stock levels, and preparing for the upcoming business cycle.

Vendor Challenges and Solutions

Finally, discussing the unique challenges faced by vendors, Daniel also picked up feedback from retailers on the need for creating durable, 'Christmas-proof' displays - which arrive ready to use with minimal store labour hours required to place on the floor. This insight reflects the practical challenges of the festive season, hectic, busy and not enough hours to get everything done on time.

The OSA meeting provided a number of suggestions for retailers aiming to maximise their festive season performance. You can read the full transcript of Daniel and Colin’s meeting below or watch their discussion here;. If you would like a recording of the whole meeting, please email colin@ecrloss.com

Colin: Well it must be about two or three weeks ago when we had our On Shelf Availability Working Group meeting. We were actually talking about the festive season. There's the holiday season where sales in grocery stores, especially goes through the roof.

And it's sort of make or break time. It's one of those real adrenaline-fueled periods for retailers where you know you try and get Christmas absolutely right and we had someone from with huge operations experience in retail to kick off the meeting. And then we had inputs from lots of other retailers in the meeting as well as a few CPGs.

It was a very very good meeting. I learned a lot and took lots of notes, but what about you as the academic? You know, I think you've got an academic notebook somewhere. What were your key takeaways Daniel?

Daniel: Well, my academic notebook is starting to be so full that it overflows.

No, jokes aside, it was interesting as you correctly pointed out that we had a wonderful expert here, a veteran retail expert and what was interesting to him, you know with all 38 years of working on retail at Christmas season.

Pretty much everything boils down to discipline and execution.

So he said first of all stop all complexity. No more shippers. No more nothing, right?

And I thought that leads me to the first point.

Apart from the fact that everything is about discipline and execution - so that wouldn't have been something special to Christmas.

What was interesting is that we actually talked very little about, you know, the tech stuff and while there is lots of tech that is being given away as presents around Christmas. It turns out that technology doesn't seem to be helping particularly in the tech Christmas, you know tech doesn't really help with the Christmas season.

As a matter of fact a lot of what we discussed was around (and here I have to give all my all my regards to this veteran retail expert), it's all about you know discipline and planning.

So I think you and I agree. What was interesting, was this thing that in the start of the year around Boxing Day you know they do a first you know debrief to figure out what went well, and what what has to be improved. 

And then later the year they start, after having done the first real orders of the Christmas presents whatever the stuff that comes from far away.

What was interesting is that towards Christmas something changes and what changes is the sort of the planning and the communication schedule.

All of a sudden it starts changing from weekly to daily.

So one person mentioned they have something like an air traffic control call every day. A daily call across the whole company. Everybody should join. It starts December 6th where 6-8 store managers dial in and every one of them gives the three top issues on that day. So that's the daily call and they also discuss what their rivals are doing.

And that wasn't just one person. There was another UK retailer they also said they forecast the sales per day to manage labour so it's a daily view. 

And there was another UK retailer who says they actually have availability targets per day and I thought that was kind of interesting that all of a sudden you see the intensity of the coordination completely accelerate and I thought that was probably right.

Colin: Yeah there was a lot of intensity as you know I think we heard you know it's a really exciting period if you're a retailer and trying to make Christmas really really successful.

What were some of the lessons do you think first, for maybe vendors who are listening and we had a few of them on the call?

But if you were a vendor what would be some of the takeaways you think you might have got from the meeting?

Daniel: One of the memorable things that I want to mention here is that they clearly said suppliers, vendors, please make displays that survive the Christmas transportation chaos.

Because they said there's so many times that they actually have the displays arrive and they haven't really survived the whole transportation, whatever it is. So they arrive and the retailers look at them say no, we can't put them up there.

Make the displays Christmas-proof, in essence, was some of the things that they mentioned.

And then the usual stuff, you know, plan tightly, coordinate, all of that, because you're not the only vendor that wants to place your display. You're not the only vendor that wants to make a fantastic and amazing unheard of promotion. And all of that has to happen in this very short time frame.

Which brings me to an interesting point that I think we both find very interesting.

There's some retailers give their store managers a lot of discretion and autonomy to change and localise some of the assortment. Totally fascinating.

One guy said there's 25% extra stock that store managers could order. Not extra stock, but 25% extra that they could actually do with what they want to. They could order in place on their own. They could change the merchandising according to the local know-how, entrepreneurial, strategically place the chippers.

And obviously, you know, there you get into an interesting situation. There's probably more experienced store managers who do it really well. And then there's the others who may not do it themselves.

But I think what you and I realised is that this disrupts the planning. And not just in a positive way. Snce all of a sudden, you know, shelf capacity changes, plan diagrams are no longer here.

You know, if I would be in headquarters, I would love to give my store managers the discretion, but on the other hand for 25 percent of the stuff, I don't have clarity anymore.

Shouldn't that influence tech?

Colin: I think it does influence tech in terms of the ability to use it.

We didn't hear of any special Christmas AI tech, did we? Coming out there. So I don't think that was a big thing.

I really caught that there was clearly a process that starts in January every year they look to improve and get a better Christmas or better holiday season sales operations-wise and execution-wise. It was really fascinating. 

Daniel: Yeah, there's one more thing that I was talking about now specifically to on-shelf availability. I remember now one person mentioned that if you realise in Christmas period that you don't have enough of something, it's too late anyway. Unless of course it's butter.

But if you really miss certain key items, there's no way you can get any additional, right? Which is actually from an academic point of view an interesting difference because there's product that exists all through the year where you have a certain way of inventory management and then you have these seasonal products where you have very often the planning, it's like a one order and maybe you can reorder once, but you cannot reorder as you wish.

And so therefore you have to plan much more ahead and you have much more of an overage underage problem. It means maybe you have too much or very often too little, but you can't change it.

That's a very interesting way of changing the planning and inventory management routine towards Christmas.

Colin: Yes, and so we did touch on, didn't we get business as usual, getting back to business as usual, after Boxing Day or sort of all like January the 6th or January the 12th and just the need to do markdowns and discount those products you've got too much of.

Daniel: Wait a second, it's not just people here from the UK and the United States on this show here. When exactly is Boxing Day if you give it a calendar day. What is that? Is that January?

Colin:No, Boxing Day is the 26th of December but as you say in Russia it's probably not. In other countries it might not be the same.

Daniel: Okay, just so we understand like for instance in Germany Boxing Day doesn't exist, I just want to make sure that everybody outside of the UK and the world understands what we're talking about. Otherwise they think this is the day when the Brits start going to the pubs and afterwards they start Boxing.

Colin: Well yeah, that happens in provincial towns all over the place every Saturday night. So what's our next one? We've got January the 17th, I think we're next up. What have we got on January the 17th?

Daniel: Well exciting, we're going to try to enlist the suppliers to help with on-shelf availability by sharing what they believe are ways they could support retailers on-shelf availability targets and a couple of things that we want to discuss

First of all Christmas proof displays, data sharing as an option. A very interesting one is how suppliers use field sales force in order to support it and to what degree there is a room for optimisation if they work together better. What else is there? You had one or two more?

Colin: Clearly there's metrics that the suppliers are working on. Forecasting and replenishment would be another one that I think they've been working on, especially around ranging per store. So yeah, it'd be very interesting to see what each of them are actually up to. Whether they're using technology as well, their perspective on some of the technologies that retailers are looking to introduce as well.

Daniel: Well, in between this call and Chris and the seventeenth, we still have Christmas. And now the question is, did you get all your Christmas presents?

Colin: I hope so. I hope so. I hope you do as well. Daniel, as ever, a pleasure. Thank you for your ongoing support and we'll see you on the seventeenth. All the best.

Daniel: Thank you. Bye bye.