Posted by: Matthew Molinari | February 27, 2012

Last Minute Shoppers Mean Big Bucks

      I stumbled upon this article today that presented some interesting data about last-minute shoppers on Valentine’s Day. Besides the fact that it speaks to what terrible shoppers men are for holidays, I think it has some important implications for the logistics of stocking your shelves.

The importance of this isn’t that people wait to the last-minute to buy gifts on holidays but I think it speaks to the larger issue of how do stores keep up with and make money on these types of promotions? Sure, stores see sales increase at their endcaps as the holiday nears with a dramatic increase the night before and the day of but how they determine how much safety stock to have for that last minute rush?

With such a specialty product, it becomes difficult to monitor how much you should have left in stock when you know that you will need as much in stock on the last day as you do a month earlier. In fact, as the holiday comes closer, you may actually need to increase your inventory to match demand and this can leave you with a lot of left over heart-shaped boxes that no one wants the next day.

In a case like this where demand is steady and peaks and then drops off a cliff a company must be extremely vigilant in watching its inventory levels and should look towards previous data to help them establish a baseline that will allow them to meet demand without being left with extra stock.

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