This holiday, will you have inventory on-hand to meet booming demand?

July 26, 2021

By: Peter Sheldon, Senior Director of Strategy , Adobe

holiday shopping preparation

There are many factors that determine a retailer's success or failure during the holidays, but none more than having enough inventory on-hand to meet demand. While the uncertainty of the pandemic caused some retailers to take a cautious approach to inventory planning in 2020, the situation in 2021 is drastically different. Fully vaccinated populations, a workforce back at work, record savings and the euphoria of “back to normal” are set to drive frivolity and excess this holiday season.

With inventory planning for the holiday season now in full swing, many retailers are upping their bets and shrugging off any excess stock anxieties they may have had in 2020. But the global supply chain looms as a new and credible threat to holiday success.

A compounding set of factors that have plagued supply chains around the globe for the last 12 months continue and are unlikely to ease until after this year's holiday season. Shipping container shortages, port congestion, the lingering impact of the Suez Canal blockage, COVID protocols and staff shortages limiting factory output, and Brexit causing goods to be held at customs across Europe are all coming together to drive up shipping costs and more critically, adding significant delays and volatility to normal inventory lead time schedules.

The unfortunate truth is that global supply chains right now are extremely fragile. The fear of missing out on what is set to be a bonanza online holiday shopping season is forcing retailers to accelerate their inventory planning and pull forward their orders for the holidays. While large retailers with deep pockets can afford to do this, for many online businesses July and August are low periods where free cash flow can be tight. With most suppliers demanding 30% payment upfront and the remainder on shipment, finding the funding to pull forward the biggest investment of the year is a major challenge. 

So, what are your options?

1. Fully leverage the cash you have on hand to make the orders.
The downside is that it puts a big strain on your cashflow and limits your ability to make other important technology, marketing and headcount investments needed to make the holidays a success. A lack of available cash on hand may create a reality that you simply cannot commit to the orders your planning scenarios are forecasting. 

 

2. Wait a few months before making your orders.
This is risky: because of the shipping times and supply chain threats, if you wait until September or later to order, it’s going to be too late, and you could end up in the worst possible situation of missing the demand and being left with excess inventory after the holiday peak.

 

3. Leverage short term funding to give you the capital you need. 
Get the funding you need to buy the inventory your need for the holidays now. You can get peace of mind that all the stock you need is paid for and that it will be here in time for Black Friday.

 

Getting access to funding is the single best way to get the inventory you need while keeping your cash flow healthy and now, Adobe has made getting financing for your holiday inventory easier via our partnership with Wayflyer to provide fast, revenue-based funding when you need it most. 

Hundreds of eCommerce companies are using Wayflyer to make their inventory orders for Black Friday. If you would like to learn more about how you can do the same, get started here.