2021 Holidays Will Stress-Test Retail - PLM Can Help

The 2021 holiday season will be a landmark one. Even though the acute disruption of COVID has started to fade, the retail industry is still facing real, ongoing uncertainty across both supply and demand. And at the same time, it’s becoming clearer which of the changes caused or accelerated by the pandemic are going to become permanent and continue to shape the fashion retail sector for years to come.

For retailers and direct to consumer brands, that combination of lasting COVID-related changes and other shifts in broader circumstances and consumer behavior is creating completely new market conditions. Conditions that will stress-test not only their business models and their readiness for change, but also the technology they rely on.

First, this holiday has the potential for high performance; industry analysts are forecasting year-on-year sales growth of 7 percent between 2020 and 2021, which itself was an increase of more than 40 percent over 2019. As families who have been separated by the pandemic plan to come back together, gifting is likely to be on many people’s minds, and if Thanksgiving and Christmas follow in the footsteps of this year’s back-to-school and back-to-college spending events, then a three-year high in shopping is all but guaranteed.

But how, where, and when that shopping is going to take place is proving harder to predict. According to Deloitte, up to 15 percent growth in eCommerce is possible this holiday season, and data captured this summer revealed that more than 60 percent of Americans plan to shop primarily online this year. For retailers who might have assumed that eCommerce was being artificially inflated by COVID, these numbers add further weight to the idea that digital’s increased share of the retail channel mix is here to stay.

At the same time, shoppers are also expected to start ordering early. With markdowns expected to be rarer than usual, and supply chain logjams affecting availability, the emphasis will be on retailers to have the right products, on the right channels, ready at the right time.

Today, various forces are working against those objectives. Brand and retail organizations are taking drastic action to bring products into the country in the face of historic shipping delays, and retail giants are on incredible hiring sprees, offering unprecedented incentives to bring in both seasonal and permanent workers to cope with expected spikes in cross-channel demand.

Taken together, these complications offset some of the optimism that retail businesses would otherwise be feeling about the 2021 holiday season. Salesforce expects that an additional $223 billion will be added to the costs of goods sold this year, and while consumer price indexes remain inflated, many brands will not wish to pass those extra costs on to consumers directly.

In this context, the true challenge facing fashion retailers this holiday is not only having the right products available in the right place, at the right time, but also ensuring that their margins and their targets for growth are not compromised by rising costs and unpredictability.

To help safeguard their ambitions for growth as the retail industry emerges from COVID, we recently identified seven key priorities for post-pandemic success in our freely-available eBook. And as the retail industry prepares for the holidays, several of those priorities have jumped to the top of brand and retail organizations’ agendas, placing greater demand than ever on their enterprise technology solutions:

• Intelligent omnichannel retail
• Compressed time to market
• Agility to pivot to new product categories
• Smart warehousing and inventory allocation

In light of the percentage of consumers looking to do most, or all, of their holiday shopping online, the requirement for excellence in eCommerce is clear. But for every retail transaction that takes place wholly online, many other customer journeys cross from one channel to another. And as shoppers continue to research products online before purchasing in-store, and to order online for pickup at a bricks-and-mortar locations this holiday, they will continue to expect a consistent experience between digital and physical channels.

In practice, this consistent experience will rely on eCommerce and physical points of sale having access to the same critical product data—something that traditional, disconnected PIM and PLM platforms can struggle to provide. BlueCherry^® Next™ PLM is designed to overcome these barriers, with the possibility of smooth integration to both physical and digital sales channels.

As the timeline from production to consumer continues to extend, as a result of ongoing shipping delays, consumer desire for newness remains intact. This holiday, that will leave retailers with the task of targeting shrinking windows of opportunity, emphasizing the importance of being able to manage and orchestrate the critical path of every product and collection to a finite degree. Built with comprehensive workflow, automation and collaboration capabilities as standard, BlueCherry Next PLM stands out from other PLM platforms in the level of control it offers fashion organizations over the lifecycles of their products—from concept to store shelf.

The same consumer appetite for newness also extends to the introduction of new products and new categories, which rose to the top of brands’ priority lists during COVID (when masks and athleisure apparel became the hottest tickets) but which is also becoming a long-term force in post-pandemic fashion, with flash sales and product drops becoming firmly established models. For brands that create products from scratch and for retail buyers, the ability to quickly respond to new opportunities and to pivot to new categories with a clear understanding of costs relies on the flexibility and configurability of the organization’s PLM platform—something the low-code, hyper-configurable BlueCherry Next PLM platform was built to offer.

And finally, bringing all of these forces together, this holiday season is set to stress-test the inventory allocation, distribution and fulfilment strategies of every retailer. Figures from earlier in 2021 are already showing a significant spike in customers opting for same-day delivery: a rise from 24 to 36 percent. This trend is likely to intensify as we approach the holiday season, with shoppers either ordering early to get ahead of potential shortages or leaving orders until the last minute and relying on rapid fulfilment.

From a technology standpoint, delivering against their expectations will require not only smart inventory management systems, but also more intelligent planning and distribution processes—all of which will rely on high-performing integrations between PLM and ERP. And with both PLM and ERP joining the BlueCherry Next ecosystem, CGS portfolio customers are well-positioned to capitalize on consumers’ cross-channel expectations for speed.

As long-term, strategic technology partners to some of the world’s biggest brands and retailers, CGS is on-hand to support the fashion industry this holiday through best practices, services, and with next generation platforms that are tailor-made for the challenges and the opportunities of the post-pandemic retail landscape.

For more on the central role that BlueCherry Next PLM is playing in preparing the fashion industry for its most testing holiday season yet, and to discover more of the seven lasting impacts of the pandemic that are changing the way brands and retailers think about core enterprise technology, download our free eBook: The Seven Priorities for Post-Pandemic Success… and How PLM Can Support Them All.