Handling the Holidays

In the midst of a busy holiday season, retailers and consumer goods companies need to keep a close eye on customer demand and merchandise replenishment mechanisms. This month, Consumer Goods caught up with Lori Mitchell-Keller, senior vice president, Global Marketing and Product Management for Manugistics. Mitchell-Keller lends insight into the importance of strong demand revenue and management strategies and how employing these strategies have helped savvy consumer goods companies maximize sales and drive profits.

As we head into the holiday selling season, what tools have executives implemented to better forecast which products will be in the highest demand at retail?
Successful internal collaboration at the sales and operational planning level helps to ensure the hottest products are on the shelves and subsequently in customers' carts.

To address the holiday sales season, forecasters, inventory and production people, as well as sales and marketing representatives should come together monthly to evaluate product and create a plan accordingly. The latest demand management products can provide much-needed intelligence for these meetings by generating reports that outline a variety of scenarios that might impact different procurement decisions. This data will ultimately help manage the Sales and Operational Planning (S&OP) process. For instance, when a product is moving exceptionally well and beyond expectations, production plans might need to be altered to produce a larger supply. As such, employing these types of "sense and respond" solutions can help retailers react to an influx in customer demand, which is critical to achieving a successful holiday season sales cycle.

With 'hot products' playing an integral part in the holiday selling cycle, how can consumer goods firms ensure that their merchandise will be replenished and in-stock?

Predicting which toy or product will be the hot holiday item is never easy, considering holiday planning starts in the prior summer, so a retailer's ability to react to consumer demand is essential for a profitable holiday season.

The ability to capitalize on the holiday model lies in a company's ability to synchronize between demand and supply, successfully. Again, it's all about collaboration. The need to communicate and share information such as scanned sales information across your retail network is a key component to reduce out-of-stocks.

The holiday season emphasizes the diversification of channels that consumer good companies are selling to More than any other time of year. What steps do consumer goods executives need to take to manage various retail channels?

Today's successful retailers recognize the benefit, and in some cases, the necessity of reaching customers through multiple sales channels. As retailers continue to consolidate via "superstore" retail outlets, managing distribution is a critical element to ensure the success of products sold.

Developing a well-thought out channel strategy helps retailers to compete on numerous levels by increasing purchases, driving store traffic as well as building brand awareness. The best way to achieve the right balance is to match customer segments and products with the best-fitting channel.

It is also important to consider the ultimate end-customer and design service options that are conducive to these customers. Implementing a successful channel strategy can serve as an opportunity to provide businesses with long-term competitive advantage.

One of the keys to a successful holiday season is leveraging the right pricing and revenue optimization tools. How can Consumer goods companies best manage this process?

Today's consumer is highly price sensitive. Because of this, consumer goods companies should look at pricing solutions that address the entire product or seasonal lifecycle, including initial price, promotions and markdowns. In working with their retail partners, solutions that address things such as seasonality will help increase a consumer goods company's ability to move their product off of the shelf.

Consumer goods firms must recognize that the key to pricing and revenue optimization is to set the right price that will act as a lever in managing demand to meet category and brand goals such as volume, revenue or market share targets.

trade promotion allowances are at a peak during the holiday season. are there specific lessons learned for consumer goods executives as they attempt to better manage trade spend?

Executives should employ effective trade promotions management solutions that can recommend promotions and trade fund allocations, enable efficient execution of in-store plans and customer payments and provides for monitoring, alerting, trend and leading indicator capabilities.
As such, collaboration amongst retailers is essential to an effective trade promotion. Collaborating with their retail partners allows consumer goods companies to better shape demand through promotional activities by design.

manufacturers and retailers agree there is a need to collaborate, especially in preparation for a key selling season.  What steps can consumer goods firms take to better work with retail partners?

The latest U.S. Department of Commerce report found that retail sales rose 0.2 percent in October. In order to maintain this trend of increased sales and keep shelves stocked with this holiday season's hottest products, collaboration must exist between manufacturers and suppliers.

Consumer Goods companies must ensure constant communication with their trade partners, preferably though Web-based methods. Comprehensive collaborative solutions can minimize information delays across the supplier network, which can help with a faster time to market. Implementing these solutions can also help consumer goods firms ensure their product is getting to the stores in a timely fashion, thereby avoiding inventory carrying costs and improving their overall margins.
Finally, in the event of a product moving off the shelf more than expected, these companies can be alerted to changes in inventory and get product where it needs to be.