How to get ready for the Christmas sales peak with SKUtrak

Christmas: it’s the most wonderful time of the year, so they say. It’s also the busiest time for grocery retailers, putting you and your colleagues under enormous pressure to make sure that your products are available and inventory keeps moving smoothly throughout the festive period.

As critical as Christmas may be for your sales and profitability, the sheer scale of the season means that accurately estimating demand is tricky. Without an excellent level of planning and execution, any attempt to understand demand in advance is likely to run aground; leaving revenue and profit ‘on the table’ through missed opportunity - or accumulating excess stock and profit penalties.

The other factor at play is that - for certain categories - Christmas has become less of a singular event and more of a planning & execution process that spans the entire year. Just as the final notes of “Auld Lang Syne” ring out, it’s more or less time to start planning once more. And while it might be too late to start making major strategic shifts for this year’s holiday, there’s still a chance to get your products on shelves in time and in the correct quantities.

After some signs of a slow and cautious return to pre-pandemic normalcy, many suppliers continue to be impacted by ongoing, unpredictable factors such as the war in Ukraine, the cost of living crisis, labour shortages, and port delays. These all contribute to ripple effects in demand that can be hard to anticipate and mitigate; volatility and uncertainty are creating added pressures that strain the supply chain, so teams also need to ensure greater resilience in their stock management processes.

With clear visibility of your daily sales - over time, by region and store - you have an early warning of the supply issues and demand changes that can otherwise derail your efforts during this most hectic period of the year. Being proactive during the festive season makes all the difference to the eventual outcome: increased volumes and greater revenues leading to higher profits.

With that in mind, here are five ways that SKUtrak can help protect your product’s presence this Christmas time:

1. SKUtrak helps better understand seasonality and patterns 

Christmas is called the golden quarter for good reason. The period between October and December traditionally sees increased consumer demand in the build up to Christmas. That means that you can't just plan for a Christmas peak; instead, you need to do everything in your power to ensure that this protracted peak doesn’t negatively impact product availability.

In practice, that means going beyond simple week-on-week analysis of changes in last year's performance and towards something much more expansive.

Solution:

Using SKUtrak, your planners can understand seasonal sensitivity as an aggregated whole. The 'Sales Performance Explorer' screen, for example, provides a helicopter view of overall sales uplift patterns. This allows your planners to understand exactly when the growth in demand starts and how much it is likely to increase based on historical performance. With the ability to drill down to SKU level insights, it becomes much easier to make fine-tuned adjustments across the product portfolio and establish whether demand in the run-up to Christmas is on plan or trading differently from previous years.

2. SKUtrak helps determine optimal order volumes with accuracy

For items that need to be ordered far in advance - especially those in the seasonal gifting category, which are often ordered on a consignment basis - SKUtrak provides an invaluable tool to help make the right choices on early order volumes. Getting volumes right not only maximises sales opportunities during this limited seasonal window, it also helps you to protect yourself from excess inventory that compromises profitability.

Solution:

SKUtrak's 'Top Line Review' screen offers a detailed picture of performance that aids and supports discussions with buyers. Equipped with a composite understanding of year-on-year trading performance, one that describes but also links trends in sales and availability and diagnoses the root cause of lost sales, helps you to build a more robust forecast and supports the presentation of order volume recommendations for a deeper, more substantive dialogue with buyers.

3. SKUtrak helps to make stock replenishment decisions to boost availability 

During the stock building period, it’s vital to ensure that stock build occurs in advance of consumer demand to avoid availability issues. This, of course, depends on a range of factors - from the sensitivity of the category and product, to even the day of the week on which Christmas lands. As a result, supply chain teams face a real challenge in making sure that the right products are stocked in the right locations and at the appropriate levels: too much could result in waste, while too little could leave shelves empty.

Solution:

SKUtrak's 'Replenishment: manage stock' screen helps you to visualise your entire flow of goods through the supply network. This means that rather than looking at changes to sales volume in isolation, you can also gauge performance in terms of availability and ensure that the movement of orders into the depot network is meeting your customers’ supply service levels. By tying these metrics together, you can improve your ability to make proactive decisions - enhancing your understanding of what is happening at all points as well as the knock-on implications of changes in demand. 

Digging deeper, the 'Daily Product Depot Level' screen provides you with an early indicator of likely availability issues by examining stock levels across individual depots and stores.

The 'Daily Alerts' screen also provides you with a vital management tool to assess daily depot stock changes by SKU, giving a forward indication of where to prioritise delivery in order to have the most significant impact on availability.

4. SKUtrak helps improve promotional analysis and forecasting

Promotional forecasting that relies upon historic POS data risks giving an inaccurate picture of actual demand. Failing to factor in the negative impact of out-of-stock situations during previous promotions inevitably leads to faulty predictions and further problems with product availability. If promotional planning under forecasts demand - it can be particularly difficult to replenish stock adequately by amending booking slots at the last minute when depots are bursting at the seams and there are limited slots available.

Solution:

Using POS and inventory data to calculate lost sales can yield more accurate sales predictions for future promotions. SKUtrak incorporates our proprietary TruDemand™ analytics engine that examines historic trading signals and estimates the true level of shopper demand for your products. SKUtrak gives you the ability to explore performance in previous promotions, including product volumes sold by item and store. 

With this detailed view of stock levels, you can use SKUtrak to calculate a range of values for the missed sales opportunity from out-of-stocks. This helps to explain why exceptional performance may have been experienced and predict where you should focus your efforts in order to maximise opportunity and minimise challenges.

5. SKUtrak helps evaluate Christmas performance

Suppliers not only have to adjust for the peak, but also consider the trough that occurs after Christmas. The week following Christmas is usually the lowest trading week of the year, and tailoring your plans around this downward adjustment is critical to countering the costly problems of wastage and markdowns.

Solution:

Using SKUtrak, you can conduct a thorough post-Christmas analysis, assess performance,  and take any learnings forward into the next planning cycle. SKUtrak provides a foundation from which to conduct a structured evaluation of overall performance, fuelling better forecasts and demand plans that achieve high levels of availability and reductions in excess stock.

Take the next step: collaborate with your retailer now to make it a bumper Christmas!

By sharing your forecasts for this December alongside last year’s analysis, you and your retail partners can work together to tackle the dual risks of poor availability and excess stock. In addition, by monitoring sales and stock daily throughout the Christmas period, you can make the adjustments necessary to ensure optimum stock levels by getting products into depots and out to the right store at the right time.

Please get in touch if you want to know more about how SKUtrak can help maximise sales during the upcoming festive period.