It’s Back to School for the Retail Supply Chain
By GUY COURTIN | CONTRIBUTING WRITER
At the grocery store the other day, I noticed the endcaps were stocked to the gills with Halloween candy… I guess the seasons come faster and faster.
Christmas in November. Valentine’s Day in January. One such seasonal peak that trickles into the supply chain planning of many a retailer is ‘back-to-school’.
Indeed, some states like Georgia and Texas are there in full tilt with increased demand for clothing, shoes, electronics and other school supplies.
While the end of the summer vacation might be the bane for many kids out there, it can be a very fruitful season for retailers and brands. But this ‘back-to-school’ is unlike any we have seen. Ever.
[See more: SHIFT Happens: Back-to-school 2021]
With much of the world still reeling from Covid, vaccines are starting to offer hope that some form of “normal” is in our sights; yet the Delta variant is pressing pause on a fully reopened society. This rollercoaster is having a significant impact on multiple parts of our supply chains, creating a perfect storm.
As just like the devastating New England nor’easter three decades ago, this “Perfect Storm” is the result of three storms converging to wreak havoc. So, what are the three storms we need to monitor?
Supply remains strained
From computer chip shortages to a lack of lumber to not enough coffee, the production side of the supply chain has been turned upside down during Covid. And some of these reveal the complexities of the products we buy; there have been stories of pickle shortages, but glass jars are in short supply.
Plenty of pickles—just nothing to sell them in. “Lumber mania”, driven by a pandemic-fueled renovation boom, caused the price tag on a new home to go through the roof.
The challenge becomes predicting how some of these shortages will impact the supply of back-to-school goods. With hybrid classes leaning on tablets and laptops, will we see a shortage of mobile computing devices?
Will the return to the physical classroom mean supply falls short of demand for new sneakers or thermos? Savvy retailers and brands will have already stockpiled whatever capacity was available, whereas those that managed inventory as if this was a normal time will find themselves short on supply.
Demand has become even more unpredictable
What will demand look like this season? We missed an entire year of demand signal harvesting.
In the corporate world, we lived through a year of “zoom fashion” with no need to spend on pants or shoes—no one will ever see them!
What about students who missed an entire year of in-person school? Will they have the same demand for new inventory, or will the clothing they bought prior to the pandemic suffice?
Look for secondary markets to potentially be flooded with gently worn clothing from last school year. Consumers’ demand might be met via a host of channels, but however we slice it, this might be the most unpredictable back-to-school season we have seen in a long time.
The Delta variant unknown
As the new, more contagious variant throws a wrench in all our Fall plans, what will happen with schools? With some early reports that schools are seeing Covid spikes, will we reach a point where some schools will be forced to go back to virtual teaching?
Are some parents going to temper their back-to-school spending, hedging their bets on what form school may take in the next few months? Have schools amassed enough PPE to contend with whatever path this next wave may take?
Back to school 2021 is facing a perfect storm of unknowns. Retailers and brands will have to watch the radars and adjust the dials accordingly. They will need to balance the fallout while preparing for a second holiday season under the Covid shadow.
As we brace for choppy weather, the next few months will teach us all yet another set of lessons in a world full of unknowns.
Guy Courtin is a respected thought leader and speaker on the topic of the future of retail. In his current role, he leads omnichannel supply chain technology provider Tecsys’ go-to-market strategy.
Guy is a RETHINK Retail advisor and has been featured on numerous industry publications, podcasts and panels speaking on the evolving retail ecosystem, the role of technology, and the interplay between physical and digital customer experiences. He offers insight into the future of the store, the new goalposts for customer loyalty, and how hybrid retail is forging new shopping paradigms.