Retail Special Day Management

FEBRUARY 21, 2023

For successful special day management in grocery retail, it is necessary to evaluate the raw material procurement process, the stock status of the products, and the supply chain capacity.

It is very hard and stressful for supply chain planners to plan special days such as Thanksgiving, Christmas, and back to school when customer demand diverges. The shipping problem is one of the factors that make it difficult to plan this period. The right amount of products should be sent at the right time, without disturbing the balance conditions by determining the customer demand in advance.

For the management of special days, the following 3 titles should be interpreted correctly:

1. Determining the future customer demand for the coming period by accurately interpreting the historical data

We know that success in stock management strategy depends on accurate estimation of customer demand. While there is information flow at every stage of the supply chain, on the other hand, every stage interacts with each other. Demand forecasting, which is accepted as the initial step of the production system; we know that it plays an important role in issues such as maintaining stock levels, providing better service to customers, improving capacity utilization, and increasing profit levels. In addition, based on the estimates; within the framework of the existing possibilities and workforce, plans are made that include personnel, materials and capacity. It is very difficult to plan and control effectively without forecasts.

One of the important features of the retail sector that the customer demand is highly affected by is the seasonality and trend of customer demand; and the other factors are discounts, promotional activities and special days. While determining which product will increase at what rate on the basis of location on special days; the data must be interpreted correctly, taking into account promotion periods, stock status of products, and exceptional sales.

For example, when we consider the Christmas season, the relevant period should be examined under 2 parts. The period before Christmas Eve, and the period approaching Christmas. During the Christmas holiday season it has been experienced that there is an increase in customer demand for products such as minced pies, roast turkey, stuffing and Christmas pudding.

2. Planning to send the determined customer demand from suppliers to warehouses / from suppliers to stores / from warehouses to stores with optimized planning considering variables such as collecting capacity and product shelf life

Considering entire supply chain structures, forecasting customer demand just before the special day is too late. Because the possible increase in customer demand should be foreseen in advance by considering the stages such as approval, preparation and lead times. There should be enough time for suppliers to plan their raw material supply by seeing the total demand that will occur.

3. Continuous control of the plans made.

Since the customer demand is determined in advance, it may be necessary to check the predicted values and to update the plans if there are changing conditions. For example; In the relevant period, a product may have been removed from the shelf, replaced by a substitute product or new stores may have been opened. The possible variability in customer demand in such cases should be reflected in the results continuously.

The success of such a period can be determined by measuring how much was sold in the relevant period after the special day left behind, how many products remain in stock, and the shrinkage rates.