NDTO News Article

A Very Merry Supply Chain: How the Holiday Season Invigorates Trade

Supply chain surges happen all the time, and often for reasons that can’t be pinpointed. Businesses operate on predictions and anticipation, meaning if economic forecasts spell a high demand period, production and exports will likely increase to accommodate—even if these forecasts don’t pan out.

But there’s one time a year when an overactive supply chain requires no explanation and can be counted on to shake things up… the holiday season!

With all the gift-buying, feast-eating, and decorating happening around the globe, the broad connectivity of manufacturers and distributors is at its most blatant. Suppliers must be prepared for a constant flow of parts to the proper production facilities, and production facilities must be prepared for nonstop manufacturing and shipping preparation. No company wants to get caught underestimating the craze of holiday demand. And they especially don’t want to miss out on increased sales because shelves sat empty while they rushed to keep up.

 

Good Tidings!

Other than the obvious, what are the factors galvanizing the supply chain toward the end of the year?

To start, the emergence of e-commerce. No longer is shopping relegated to the physical act of going to a store and purchasing a product. Now, you can purchase the product from anywhere at any time and it will show up on your doorstep in a matter of days. It’s no wonder the holiday season welcomes a 40% increase in shipments.1 Suppliers move parts at an increased rate to accommodate this influx of online orders, giving those elves at Santa’s workshop a real run for their money.

Speaking of which, over 6,000 U.S. manufacturing jobs are said to be filled in the final months of every year to improve production efficiency.2 This small but mighty upward tick in employment benefits both trade and the economy—larger supply, faster shipments, and more consumers!

Thanks to these factors, and despite 2024’s turbulent state of inflation, this holiday season is expected to see a projected jump in sales.3 Wage growth has, for the most part, overcome the rate of inflation from month to month.

 

Last Christmas

A year ago, November and December retail sales saw small but comfortable increases with electronics and appliance stores at the top for profit. These were followed by health and personal care, clothing and clothing accessories, general merchandise, sporting goods, and more, totaling $964.4 billion dollars in sales—a record for the U.S.4

That’s a lot of merchandise. A lot of constant forward motion. How can businesses be expected to keep up?

 

He’s Making a List1

There’s a number of preparations that can be made so your business doesn’t fall behind or fall flat while attempting to match consumer demand during the holiday season.

 

  1. Flexibility

Keeping a flexible network of suppliers, hiring extra help, and adjusting your operations to meet fluctuating demands can be key to thriving during the holiday season. Flexibility ensures that your business can adapt quickly to unexpected challenges, such as delayed shipments or surges in customer orders. By diversifying your suppliers, you reduce the risk of disruptions if one source falls short. Temporary staff or additional shifts can help maintain efficiency during peak times, ensuring your customers receive their orders on time and with the service they expect.

 

  1. Inventory Management

Plan your inventory strategically to avoid overstocking or understocking. Analyze past holiday sales data and current trends to forecast demand accurately. Keeping a balance between high-demand items and your core products ensures that you can meet customer expectations while avoiding the financial strain of excess stock. Collaborate with suppliers to secure priority restocking during peak times and explore just-in-time inventory options when appropriate.

 

  1. Technology and Automation

Leverage technology to streamline your operations. Tools like inventory management software, automated order processing, and AI-driven customer support can significantly improve your response times and efficiency. These systems reduce errors, speed up workflows, and ensure a smoother experience for both your team and your customers.

 

  1. Clear Communication

Stay transparent with your customers about shipping times, stock availability, and potential delays. Clear communication builds trust and helps manage customer expectations. Use your website, social media, and email campaigns to keep customers informed and engaged throughout the holiday season.

 

By focusing on these preparations, your business can not only meet holiday demands but also strengthen its reputation as a reliable and adaptable brand in a competitive market.

 

We have all year to prepare for the holidays, but they can still catch SMEs by surprise. End-of-the-year exporting can be frustrating to navigate when you depend on a stable supply chain to move your own business’s production along. However, an active supply chain is never a bad thing. Take advantage of the season and go into it with a plan in place. You’ll reap the rewards for months to come!

Happy Holidays from the NDTO!

 

1What Business Leaders Need To Know To Have A Successful Holiday Season

2How Is Our Economy Impacted by The Holiday Season?

3Dip in Inflation Fuels Boost for Holiday Shopping Season | SupplyChainBrain

4NRF | NRF Says Census Data Shows 2023 Holiday Sales Grew 3.8% to Record $964.4 Billion