Ah, Valentine’s Day. Love is in the air, romance abounds and heart-shaped boxes of chocolate fly off brick-and-mortar’s shelves. Yet, for most retailers, the day marks a continuation of sorts as holiday season mayhem resumes for a short time.
Often considered a “Hallmark holiday,” the popularity of Valentine’s Day shows no signs of slowing down. In fact, 62 percent of adults in the US say they celebrate the holiday, and spending tops over $18 billion each year. Of that, $8.9 billion is spend on sparkling wine (that’s 174,000 gallons, for those calculating). Even more impressive is the 150 million cards and gifts exchanged each year.
There’s no doubt retailers can win big by participating in Valentine’s Day activities with high demand products like flowers, jewelry, apparel, footwear and even date-night packages. What most don’t realize, however, is the massive toll it takes on retailers’ logistics and supply chain operations to — literally — deliver everything-. Outside of their traditional holiday peak season, Valentine’s Day is one of logistics companies’ heaviest delivery days of the year. In fact, UPS adds 130 flight segments to handle the surge in transports.
Further, the cold chain works double time on V-Day, bringing approximately $2 billion in revenue to florists in 2017. Most floral companies forecast and plan for up to one year in advance for the big day: With a high volume of perishable goods and fickle winter weather, retailers must ensure their supply chains are working just as well as they were during the holiday season. Most florists consider Valentine’s Day a “last-minute holiday” as most orders come from men who tend to delay making their flower orders until the last moment.
This makes forecasting a small nightmare, and while minimizing this variability makes florists’ jobs easier, it’s difficult to do without an organized backend that allows retailers to prepare for inclement weather and other logistics headaches. The same goes for organizations in other industries, as well – including food and beverage and apparel to name a few.
However, retailers don’t have to feel helpless when it comes to circumstances beyond their control. They can easily mitigate cost-related risk by better planning for the unexpected with digital sourcing tools and “what -if” costing scenarios that will help them manage complex situations and flexibly simulate various scenarios. This approach alleviates major headaches for all players throughout the supply chain – from sourcing to delivery — as it offers retailers a way to ensure accuracy throughout the product life cycle.
Retailers might as well be hit with Cupid’s arrow when it comes to tools that will help them better forecast and plan for peak shopping seasons. With Valentine’s Day in sight, investing in new retail technologies to design, develop and deliver goods to market faster than ever before will be retail’s key to holiday success.
Prepare for unpredictable: Learn how retailers are using “what-if” costing to mitigate risk and volatility in the market.