The team at fulfilmentcrowd – a global logistics platform for high- growth omnichannel brands – share insight into tech and its role in delivering peak season profitability.
Lee Thompson, CEO at fulfilmentcrowd commented: “In the ‘Golden Quarter the need to concurrently serve both retail and DTC amplifies the problem. A recent study revealed that 48% of total stock bought by UK retailers had to be discounted, highlighting the negative impact of bad buying disciplines on the bottom line.
“We see that high-growth brands aren’t investing in data science, preferring a more instinctive approach which tends to result in misaligned buying behaviour that minimises stockouts but ties up huge amounts of capital in goods and storage. In our view, Forecasting software is a far more effective approach to supply chain management. Accurate prediction of future demand based on seasonal trends and planned promotional activity drives more informed and timely buying decisions. It connects organisational processes, sustainability and ultimately improves the customer experience and nothing frustrates a customer like finding their favourite item out of stock at Christmas!”
To further increase sustainability, retailers should consider the following:
– Nearshoring supply chain reduces delivery miles and carbon impact
– Optimising freight routes and contracting with green logistics providers
– Packaging design that provides form and function whilst increasing freight density i.e. reducing air gap and reducing GHG per unit
– Applying circular economy principles to product ideation and design
Thompson added: “By applying advanced algorithms to stock, supplier and sales data, forecasting can predict future demand more accurately, helping brands maintain optimal stock levels, particularly on the best-sellers. This ensures the right amount of stock is ordered at the right time, reducing risk of stockouts and overstock, which ultimately leads to better cash flow and profitability.
Foresights is a new addition to the fulfilmentcrowd platform – that empowers omnichannel businesses to make smarter, data-driven stock purchasing decisions. Shaun Cummins, CIO at fulfilmentcrowd explains: “The tool gathers purchasing data, order information, and inventory levels, applying time-series behavioural algorithms to uncover trends and predict future demand with precision.”
The benefits of advanced forecasting tools include:
1, Maintaining optimal stock levels to meet fluctuating demand – enables users to better match supply of goods to demand which reduces the risk of overproduction and costs of buying/holding excess stock.
2, Enhancing buying decisions using actionable trend insight – better buying decisions enhance the allocation of resource (labour, material) in terms of quantity and timing, reducing waste and environmental impact.
3, Improving stock turn, cashflow, and operating margins.
4, Longer term inventory planning reduces the need for high GHG impact expedited shipping (e.g. air freight) in order to satisfy demand.
In normal trading conditions, the Foresights demand forecast is accurate to within +/- 15% on product sales and order volume, with a dashboard view highlightings which products are in-demand, non-moving, low stocked, well-stocked, overstocked , and out of stock so retailers can make quick decisions based actionable insight.
Based on the current data, 32% of products that fulfilmentcrowd hold stock for are non-moving products. With this in mind, Thompson shared his thoughts on how to handle non-moving stock: “We’re always looking at ways to develop methods to keep product away from landfill or incineration – examples include selling through on promotion, donating to charity or social enterprises, recycling, upcycling, and reprocessing where possible”.
Looking ahead to the new year, fulfilmentcrowd predicts that the first week in January will be the busiest week that month, as the January sales kick-off.
fulfilmentcrowd share some last-minute tips ahead of the start of the January sales:
1. Check last year’s data, anticipate trends, and have a backup plan for your most popular products.
2. If you can, highlight your bestsellers and top deals across multiple channels, designating ‘hot zones’for items likely to fly off the (virtual) shelves… , but don’t forget to manage expectations.
For more information, visit: https://www.fulfilmentcrowd.com/fulfilment-platform
