Webinar: Xmas race: How to avoid empty shelves or overstock. 8 tips for retailers

hello everyone my name is Anna together with me today is Helen we will be conducting the webinar about how to prepare your inventors for Christmas uh meanwhile we are waiting now for some participants sir uh let me briefly tell about the topic like we definitely know from our experience how important and how complicated it is to prepare the inventories in the retail for the webinar oh sorry for the Christmas rush and that's why we decided to conduct the webinar on this topic because we know that's a big pain for the retailers and we will we'll try to help you with some hints and tips to better first of all to better understand the challenges in this process and secondly to give some hints to provide some hints to be able to deal with these challenges let's wait just a couple of minutes for the other participants to join and we will start the webinar the webinar approximately

will take about 40 minutes please feel free to type your questions in the chat we will be trying to answer them during the process or in the end of the webinar let's wait a couple of minutes and we can start uh yeah and if in a case of some issues with the connection to the webinar please try to connect for once more time and if it doesn't help please write us for us to understand that there are some issues but hopefully everything will be fine yes also if there are some issues with the video or the sound also please us please let us know in the chat yeah so uh as Anna said it is very

complicated to um prepare to inventors to the holidays to any season a seasonal spikes but especially to Christmas holidays as there is a lot of different specifics and to prepare the webinar was was a an issue too as well as inventors of course it was not so hard um but still uh I hope that it will help you to make your processes better even this year yeah we are pretty sure that you've already started repairing your inventors for the webinar but still we have we hope that you may use some hints here like along this process and it might help you uh of course there will be a recording of the webinar so we can we will be able to share the recording and uh there are some there will be some checklists during the

presentation uh so we can also either share it after the webinar or you can make some screenshots during the webinar just one minute and I think that we can start there are some just uh some participants who are joining okay I think that we can start if someone will join it will be totally fine but let's not to give take the time of the other participants so as I mentioned today we are going to talk about the preparation of the inventory for the Christmas season we know that it's a big Challenge and a big pain for the retailers that's why we decided to try to help somehow you in this process to be able to meet these challenges and to prepare yourself better in terms of

having the bigger sales and in terms of not having like the overstocks uh let's start with some introduction of a brief integration of our companies uh but before that uh let me introduce the speakers uh today uh the webinar is conducted by Helen she's the product director and the inspiration leader of the product with which we helped to deal with the inventories uh hello Helen one more time hi hi thank you very much for having me here and the other speaker will be me I'm Anna I'm head of Business Development I'm responsible for communication with the customers on different stages so we will be the speakers today uh briefly about our company and what we do uh we Alicia and we provide different solutions for the in for their optimization and automation of the retail processes and Elite here is a platform that consists of three main modules the first model is inventor

optimization this is the model that helps to cover and automate and manage their replenishment process uh the other module is promotional intelligence it's the module that helps to uh make the forecasting of their promotional sales and the last but not the list is the Shelf efficiency it's the uh solution that helps to cover the merchandising process starting from the beginning of the starting from making their floor plan interactive floor plan on placing different equipment on that and making the planogram and controlling the process of execution on the planograms uh the topics that discovered today uh it can be like in the topic that is covered today there are two solutions from liffel platform that can help you with dealing with that it's inventor optimization first of all because it's the basis in the inventory management process and promotion intelligence it's the module that helps to deal with some complications in the

promotion activities um uh regarding our experience we are present in um 17 countries and for the current moment we have more than 160 projects implemented and in our team there are around 100 employees we have a good experience of working with different Industries in the retail uh we work with uh like uh rather standard retail verticals such as grocery convenience store supermarkets and also like some drugery Pharma retail chains and ending with some specialty retailers like toy houses some pet stores spare parts and so on uh so uh coming back to our topic uh uh let's uh like uh have a look at how the webinar will be conducted today what will be the main points of the webinar so first of all we will speak about the main uh challenges in preparing your

inventors for Christmas season secondly uh there will be a checklist on how to prepare your inventors for the Christmas rush that you can use during your like current process of preparation and for the next year of preparation uh after that we will tell you how we solve it with lifer uh we will make some demonstration of the system but in any case you can use some hints for that even without using the system by just using some settings some methodology in preparing for the promo activities and preparing for the seasonal activities and in the end we will talk about some useful hints for the preparation of the seasonal activities and make some conclusions so let's start for with the main challenges in uh preparation of the inventory during the Christmas uh so uh the first one uh will be uh like that uh suppliers are overloaded and it becomes

even more intense uh closer to the holiday so it is really necessary to prepare in advance because uh the closer to the Christmas they will be in a rush and they will be irritated with different orders and most probably their stock balances will be run into zero so you will not be able to order the amount that you actually need so it's very important to prepare like beforehand just buy some small steps in this process uh just like a couple of months before the Christmas season uh so the next one is uh it is really a challenge to identify the particular items inside the categories actually the categories and particular items inside the categories that will uh grow that will have the sales growth before the Christmas holidays and workload precisely on The Ordering of these items on increasing the orders for just like for these items uh the third is that it can be a very

complex logistic process to slightly increase inventory step by step because if you increase it down one at all first of all it can be some logistic collapse and their stores will be overloaded with the stock balances the store managers will be overloaded with the deliveries and the DC might not have placed enough place for there or like all their prepared stock balance and increased stock balance so it's very important to do this process very smoothly and to prepare beforehand for that the next one uh that there are going to be a high increase in sales and uh of course for that so we need their uh like their more inventories and it is necessary to prepare your logistic processes to that uh to that like increase and May make it so that to make it balance or both at the level of the

stores and at the level of the Distribution Center so regarding the next part of the challenges uh of course it uh becomes more um more hard to uh to forecast to the uh the sales for the new items that we are not previously in the assortment matters like the previous year uh because of course like for some items that were in sales previous year you like at least you know like the sales Trend you might guess uh the sales ratio increase but for the items that we are not in the assortment it's very hard to uh to work with these items uh the next one it's uh to uh consider the oval overlap of seasonal sales with promotional sales in terms of the forecast because this is true uh like actually two different things but they are running usually they are overlapping uh during some holidays and Christmas as well like in particular

so it's very hard to uh divide them but at the same time to consider them uh uh like at the moment uh while making the forecasting and while planning the replenishment process uh the next one is uh it's necessary to create to consider the additional layout of goods and to divide them from there separately from the seasonal sales because the additional layout it is uh like a separator a place at the store which you can sometimes it can be prepared prepaid by the vendors and they are paying for that and that's why it like should be be considered in a different way the next one it is important to use different approaches in the replenishment while planning the this process for different store formats for different performance and in different storage store locations

because for example people they are usually before some holidays they go to the big stores make some big grocery purchases and to some big supermarkets outside the city and maybe they are like taking some smaller items from the convenience store so it's obviously that at the in Supermarket the demand will uh will increase a lot uh well at the same time and the convenience stores it might not increase so much and in some cases it might even decrease because like previously the purchases that were made at convenience stores they were already made at the supermarkets uh and uh or of course uh talking about the human resources it is very important to plan and allocate the workload uh in such areas as Logistics purchases and operational uh because people are overloaded uh during the Christmas rush and it's very important not to stress

them out but to do this very smoothly and uh like try to allocate maybe to delegate some tasks to some other departments in terms to like better to make the better preparation for the promo for the Christmas rush or other holidays Rush and the last but not the least it's uh uh like we definitely know that during these preparations when everyone in Russia there can be a lot of like human factors there can be a lot of mistakes there can be something that goes wrong and some first major situation and people are stressed out and uh it's very important to have the ability to very quickly react on these changes on this Force Major situations and be able to deal with them uh during this celebration process so with this being said let's talk how to deal actually with these challenges and I'm giving the word to Helen she will talk about the

checklist and some hints how this can be solved thanks and um uh yeah so really the main challenge uh is to prepare the balance in terms of inventory management of course is to prepare the balance quantity for uh the last four days or a week it depends on different retail verticals now before Christmas uh or New Year depending on the country of course we are going to talk about some general things but their preparation will depend will definitely depend on the structure of the retail chains as a supply chain I mean uh because sometimes in some cases for somewhere articles it can differ a little and for some retail chains who doesn't have um the central warehouse or the

distributional center some points could differ as well but still uh just in general uh the checklist will be like the following on the first step it is important to identify the list of items that will definitely increase in sales uh you know it is one of the hardest tasks as you need to analyze all the product range and calculate the increased sales for a particular risk use in particular locations but not in terms of categories as some ASCA use from from some categories could increase in sales and other sqs from the same category could not increase in sales or even decrease in sales for this period sales May Vary depending in on the store format location and other factors so it is important to identify this particular skills

it is interesting that we have noticed a rather High spikes in nuts of this product categories like the household chemicals during the Christmas holidays it is just an example that highlights that it is necessary to investigate all the product range and see which skus need to increase their balances during the preparation to their Christmas holidays uh the second Point here is to decide where the increased quantity need to be stored now before the start of the sales Spike on their uh distributional central warehouse or in stores directly of course this point is important only for those um retail chains who have the uh two or three or more levels uh Supply chains in in case if there is no distributional

Center or central warehouse of course this point is not so actual so it is rather crucial uh thing that the store capacity is decisive Factor here and for for instance we have a convenience store um chain as a customer and their square of the trading area and the back room is so limited that there is no way to store The increased quantity on the level of the stores and that's why they allocate the increased quantities on the level of the central warehouse and increase the quantity of deliveries to the stores during the high season period just to make sure that they ensure the high level of availability during the increased increased demand season uh the next Point here is to make a

queue of items in the order they must be delivered to the distributional center or Stores um usually it is done in terms of categories for example dry goods that do not have a big size uh supplier package or do not have big size of the item package usually are ordered and delivered primarily it is highly recommended to divide the deliveries of each category into several replenishments now so that the inventory of each SQ is increased slightly just not to collapse the logistics capacity and operational processes we see that this is a tricky Point as this this increased quantities must stay so-called untouched until the spikes they were prepared for will start and um probably it can be a rather obvious in

terms of the process but it is not so obvious in terms of uh the out ordering system as uh as I have mentioned uh they must be untouched they must stay untouched on the level of locations or the distributional center and sometimes it is not possible using some outdated out ordering system the next point is to identify the new skills that are predicted to increase in sales due to the rotation in the product range by sort of 40 percent yearly the quantity of such sqs could be significant so it is rather important to have the algorithm and the possibility to calculate to automatically calculate um their projected demand for this kind of SKS the next point is to calculate

the forecasted demands increase demand and divide it into some parts as I have already mentioned in the third Point sometimes it is possible and economically effective to make one-time delivery but usually we see that retail chains divide the overall forecasted quantity to some uh to some parts usually to three parts deliveries and decide what percentage of the overall quantity must be delivered in each Supply and today I think that we will have an opportunity to see how it is done it is possible to do in a liver punishment uh liver inventor optimization system the next point is to calculate the order dates in stores and warehouses to have the deliveries done due to identified Q

of items and makes and makes those orders um there you know there could be really dozens of suppliers who will make those deliveries so this point should be done automatically then next Point uh is after receiving the increased stocks it is very important to proceed with regular orders as this quantity must be untouched or reserved for the upcoming season it must be taken into consideration by by the regular order generation the next point is to identify the date when the demand Spike will end uh as this period usually is limited by one week you need to stop ordering the increased quantity depending on how many days are left to the end date uh just not to lead to the overstocks generation

uh that will definitely increase the inventory turnover um and there will be some issues uh with uh with the inventories after the demand Spike will end and after this season ends it is important not to rely on increased sales in some further orders and the last but not the least it is very important to um to have this uh um analyze analysis of effectiveness of all actions by all participants we mean the category departments the logistics Department operational Department marketing department so all the uh Departments of the retail chain that are responsible and somehow involved in the processes of the preparation to the Christmas holidays uh so it is really

important to stay together and to analyze some bottlenecks that were going on during the Christmas holidays not to meet the same problems next season or next year and we call it just the process of continuous Improvement and also yeah just I just wanted to let everyone knows that it is important to analyze afterwards but a lot of uh like in general a lot of people they come back to the regular routine and they just forgot about this important step but it is really important and it is important to uh like uh to take and find these conclusions that we made previous here and use them for the next year yeah so true so true and uh and uh I have mentioned in the eighth Point uh that uh it is very important to identify the

date for the end of the spike and not to order the increased quantity uh not to list lead to the overstocks and I just wanted to demonstrate just the classical example of uh this kind of a problem uh as you can see it is a screenshot from our system for Estee martini um just a classical example for for the Christmas preparation then light blue line is the line of balances and we see that it was the preparation for first of all it was a preparation for the new year uh uh and afterwards it was a preparation to their Valentine's Day and what we can see here is of course the some mistakes in forecasting on one hand and some mistakes in ordering process on another

hand and we see this classical example when we have a problem with these balances and as you know uh Aston Martini is a rather expensive SKU uh so the cost of inventories on the uh particular location is rather high so not to lead to these problems it is important to check all the points from the checklist uh so now I want to demonstrate how it is done in our system how we can help our customers to deal with this holidays delivery we call it holidays deliveries uh and how it is done in the leafy Adventure optimization system uh so uh we have the special special functionality special feature which is called holiday deliveries uh in the demonstration version we have some

examples of uh already done um prepared categories for instance we are preparing for increase in sales for whiskey and as you can see I have uh four steps preparation and I'm preparing in first in four steps beginning from the 10th of November and ending with 4th of December and I'm preparing smoothly and slightly to the increase of demand and starting from the 10th of November I will prepare for 10 of the overall increased quantity afterwards it would be 20 and afterwards it would be 40 on the 27th of November and the last delivery would be for 30

percent of the over overall forecasted quantity and it will be done on the 4th of December how it is done just now I will show you how it is done for example I am copying I have uh the 40 preparation uh that will start on the uh 12 20s of November before sparkling wine and I want to um sparkling wine Christmas number two for instance I have the special holiday delivery type it is called Christmas holiday uh their previous uh delivery the first delivery would be done on the 20th of November and this second delivery must be done before the 27th of November and I need to clarify the uh the order layout date so

we are increasing the Safety stock not the uh not the Target stock level but the Safety stock and it is done due to the one of the recommendations from the checklist that uh the quantity that is need for the regular sales it is the target uh stock level and uh this increased quantity must be divided um must be ordered like an extra quantity to uh to ensure that this quantity will stay untouched to the date of the season when the season will begin uh and uh here I need to fill the last 60 percent of uh of the projected quantity we have an opportunity to calculate this increased sales based on forecast or based on the sales history I

like to calculate it based on forecast as I rely on forecast better than on the last sales period so I just need to call to make all this calculation I am making a setting that my season will be starting from the 18th of December and will end by 25th of December and the last thing to uh to complete is the end action uh the end the end date and the end action um when the system needs to automatically restore safe to stock and average daily usage not to rely on this increased sales during this preparation period during this not preparation but the seasonal Spike of demand during the during this period during those days and afterwards I have already copied

this uh particular category of sparkling wine and all this will apply to this product range and the system uh by the specified by the specified specified date Sorry by 27th of November will calculate when the increased quantity must be ordered to be to ensure that the increased quantity will be on the store location by 27th of November and will automatically increase uh the the safety stocks and order this increased safety stocks automatically as well uh it is the first part of the process and the um sometimes we Face uh that it is necessary not to prepare only to the seasonal Spike of demand but also to prepare to some promotional Spike of

demand as uh we see that it is a usual story when um the seasonal spikes and the promotional spikes are over overlapping each other and to be sure that everything is calculated and prepared uh correctly we need to understand which particular promotions uh we are we will face in the nearest Future during this uh seasonal seasonal uh demand spikes so I'm given the word to uh Anna to comment on how it is done in terms of promotional activities yeah first of all it is important to understand the overall picture of uh what kind of promotions we have what are the types of these promotions how many promotions of which type how they are overlapping during different periods of time how many skus are participating

what is the percentage of the promo and what is the promotional sales exactly so it's important to have that Consolidated in one place and to have the visually understandable picture how that will look like now let's say the real we can drill down from here to each uh promo uh each promotion and see uh like the settings for the promotion and the list of course of the which which products are participating in this promotion activities and what are what were the settings applied to these promotional activities if you will go to the settings in some way it is similar to uh what Helen showed us for the holidays but still there are some differentiators um and uh like here we can apply some settings for the promotional so first of all we are like naming the promo uh we are choosing their promotional type

dependent it can be customized dependent on the retailer specific uh we are choosing if the promo is advertised or not not advertised and what is the problem mechanic as a Next Step uh we are I then we are letting the system know what is their like beginning date of their promotion and uh it in some cases for some uh retailers for some store managers it is important to prepare beforehand not just like before the promo starts but maybe to make some additional layout on the store and so on so uh in the system we can indicate it there when the order should be made so either it is like the closest order to their uh like promotion date or it can be even earlier so to give the possibility for the store manager to prepare for that in like in a better way uh the third one is uh uh the settings on how to uh let the system know how to increase on what quantity to increase

the this first initial order before the promise starts uh at lithio we use two different approaches to that the first one is the statistical approach sure which is used mainly when the customers when our customers they have some basic data uh the level of data maturity is not very high uh and maybe the history is rather a short one so in this case we use we use statistical methods that help to identify this first order this quantity before the promo starts so for the for the beginning of the promotion activities and after that the system them like we could adjust to the real demand during the promo and the other way is uh how it can be done and how we do that uh it's uh we use ML and deny algorithm to understand and to forecast the this order before the promo starts and also to forecast the sales uh for the whole promotion activities uh for

this we take into consideration a lot of a lot of parameters and we apply ML and AI algorithm on that so we take into consideration the level of the discount the promotional mechanic uh the items that we are like uh that are participating in the promo and the history of these items in different in other different promos and in previous forums so there are a lot of uh a lot of uh um parameters that are considered during planning of these activities uh and uh Helen can you go to some particular uh promo and see like how we can see the sales forecast ratio and the sales forecast for the promo in general I think that there is some Gap in the connection uh maybe on my side or on the Helen side

everything is fine so we are going back to some particular um promotional activity yeah yeah uh and can you please open yeah the list of items and add the columns with the uh sales ratio for a cast and like sales for a test uh so these two numbers they are provided by the uh by our algorithms and they allow to understand uh the ratio so in how many times the sales will uh and how many times the sales will increase during the promotional activities and actually the sales increase uh like the sales itself during the promotional activities and that will definitely help not only with this initial order uh for the promo start but it will have for negotiating with the suppliers on the level of the discount on some previous years on some particular conditions for you as a

retailer and so on and uh yeah so this is important also to understand these two numbers uh now let's get back to the promo settings yeah there is one uh one step here in planning the promotion is to make the uh correct completion of the promo or activity not to make sure uh that we are not going with the overstocks after the promo ends so it's important to to uh specify the end date of the promo activity and to choose what will be the end action so there are several types here and in case if it's the regular assortment it can be either to restore to the old value or it can be calculated the buffer for the last orders uh in case of some assortment that is uh like uh we are selling it out and it is not anymore in will be not anymore in our assortment we can make the out mover or

to return it to their uh specific order so make to order service if it's some seasonal activity and or not regular assortment uh and as the next step here after the promo have problem has finished it's very important to analyze the results of the promo to make some conclusions for the future promo to understand the accuracy of the forecast and so on so we are going to analytics here and uh here in the analytics part we are able to see uh what is the like first of all the items availability and in percentage during the promo and uh what is actually uh what were the Lost sales when the good was not available

uh we had like very huge Overstock and it was not sold during a whole period of time so it's important to understand both the stocks out there from the first day after the promo and to understand after that and analyze the overstocks after the promo uh and we can see here in our system also different Deltas that helps us to identify and compare some different periods with each other and to uh to see what like what is the efficiency of the promo activity in general in our retail chain and also uh like additionally we will not show that but still we can make some a lot of filters by the manager uh by the store and so on and to identify that in some more details and here we can drill down directly to some specific warehouse for example we can choose some product category here and uh yeah here are a lot of product categories we can switch to just like one product categories or analyze them in analyze

all of them in general and we can see here uh all like detailed information in the table that is needed for us to understand like the sales quantity the sales in money uh the average sales and other the overstocks after the promotion and so on so uh it's very important to step in planning the promo to analyze and after that to make some conclusions to better run the future promo and I would say that in case of applying and using some enhanced method over the forecasting the system is learned on itself on the data that are collected in the system and it will increase their forecasting accuracy for the future promotion activities uh so uh with this being said I'm giving the word back to Helen so that we are talking about some as a conclusion about the useful hints for making the promotion activities

uh yeah thank you very much Anna uh yeah and in this webinar we decided to add some useful hints that will definitely help in preparation to the Christmas holidays um the first of all the increased calculated quantity must stay untouched um till the beginning of the seasonal uh seasonal sales and it needs to be definitely considered by the outer replenishment system as and managers should see this quantity this reserved and touched quantity and the reason why this quantity isn't touched and why we have increased this quantity and the main reason here will be the preparation to the seasonal Christmas sales uh the process is fundamental uh and um as we have mentioned in the checklist before starting any kind of the

preparation you need to develop the logistics process and understand where how um and uh how many quantity what quantity of items and where exactly this quantity will will be stored before the start of the seasonal sales as you know sales could increase by 10 20 times and of course it will influence directly to the quantities of inventories that need to be stored uh so that's why it is very important to develop such kind of a logistics process uh promotional forecast must be calculated separately from seasonal projection as we have demonstrated um in the for for instance in our system uh there are two separate functionality blocks that um are in charge of preparation to the seasonal Spike of demand and to the

promotional Spike of demand and afterwards the system must have an opportunity to multiply these quantities if the same as you have both of this fluctuations of demand uh all calculations must be done using store storage capacity as a basis uh and and I think that's it is clear that uh it must be taken into consideration first of all and suppliers holidays should be considered considered during the order calculations uh it is one of the um functionality blocks in our system as well we call it supplier holidays and it is known that after the seasonal spikes of demand especially during Christmas and New Year preparations afterwards suppliers have their holidays and they are not able to make the deliveries and to take orders from their customers from

retailers and during this period the system the auto ordering system must not calculate orders and send them to the suppliers as they will not be able to cover this cover this necessity and cover these orders so first of all it is necessary to um not to form and calculate orders and send them to the suppliers during this supplier holidays by the way it is important not only during the Christmas holidays but sometimes it is suppliers have some some reasons to stop their deliveries and of course before the start of this suppliers holidays it is important to calculate the increased quantity during this period of time when there will be not able to uh deliver to make the deliveries to their customers

um and I think uh yeah uh problems and mistakes uh discussion after the end of the seasonal uh seasonal Spikes have to be made as well as conclusions uh to ensure that they won't happen in future yeah it is really important thing in the process of their continuous Improvement um you know processes sometimes are even more important than the forecasting and the calculations as if this work is not done sometimes we see that this mistakes are uh are happening in future as well so we highly recommend to have such kind of a process after the season ends and after the each promotion ends to see the result and to understand some bottlenecks and some pain points that were happening during this activities with this being said thank you very much

it was a pleasure to uh talk about uh this topic today uh and that's it in case of any questions uh we will be happy to answer them um just now or if not please contact us and we will be happy to talk about the preparation or in general about the inventor management as well thank you thank you for your participation and have a good day ahead today