Take These (Supply) Chains From my Heart – Planning for Valentine’s day.

Valentines Day Howard Blog

Introduction – Well, hello

Supply chain planning may seem oh so unromantic – what with all the talk of S&OP, and IBP and all of our websites full of pictures of warehouses. All the things we talk about and do are focused on getting the right things to the right people at the right time. Bringing joy to the hearts of millions when they unwrap that special gift come February 14th is our reward.It’s also quite a challenge. But we love challenges.

Desire

That’s the demand side. February 14th. Once a year. Sometimes on a week day, sometimes at the weekend. Precedents can be misleading. Out of date too – no-one wants to be giving last year’s gift. In a 2017 survey for Statista of people who were definitely going to buy valentines gifts, 11% did not know what they were going to buy and 13% were considering gift cards, so forecast accuracy at nearest and dearest level could be below 80%.

Infographic: The Most Popular Valentine's Day Gifts In The U.S. | Statista

What is more, the 2 most popular gift choices, Chocolates and flowers (76% between them) are two of the most delicate and sensitive products you can think of. Chocolate does not travel well on warm days. Those of us in the temperate north in Winter may not see this as as an issue, but anyone living below the tropic of Cancer will think hard before having chocolate delivered at this time. Flowers tend to droop soon after cutting, so getting them at peak condition is crucial. Having excessive stock on the 15th is fatal.

Even for ambient gifts such as perfume and lingerie, excess stock can take time to shift.

Simulation

Marketeers are always coming up with new ideas for Valentines -it’s a big market after all. Margins tend to be high and most of us take part in one way or another. Even if it’s just an excuse for a meal out or a post-Christmas chocolate binge. But this is one area where marketing and supply chain must work together to seize the opportunity and minimise the risk. Specific red or heart shaped products with the word “Valentine” in large letters on packaging festooned with ribbons go down well, have the highest margins and highest risk of waste.

At least one UK retailer sells a special Muffin for Valentines. This is an everyday fresh product that just buys into the mood and consequently has a life of around a week.

Fulfillment

Now we need to hit the spot in terms of supply. This is where we can all get creative. Firstly, we should supply the specific and novelty Valentine items. But in limited quantities. If we sell out, we can stretch further next year. Love needs a bit of imagination after all.

Many of our normal items can be brought into play. Lingerie is a good example. We know two things about lingerie – Demand will be higher than normal and the color mix will change. Lingerie Valentine promotion pages are not surprisingly stuffed with Red and Black items at full price. Excess stocks will not be wasted.

Flowers are managed by stem, not by bouquet. The overall level is known and all roses are red. The biggest question is did the latest romcom feature a single red rose or a dozen…? Florists will order in advance, and encourage the romantic among us to order early. Growers will grow to meet the day. But this is a classic When it’s gone it’s gone situation. Any Romeo’s leaving it late will end up with a random bouquet of remaining stems. It will still be beautiful. Substitution at it’s finest.

Chocolates pull off one of the oldest tricks in the book. Upscaling – Bigger, classier boxes.

Sealed with a kiss – just for you

A growing trend is personalization – A message on chocolate slab, an engraving on just about anything, Personalized cards and so on. High margin and low risk. The planning is passed to the lovestruck and the producer can make to order. There’s no waste as common components will be used for other products and the receiver will appreciate the special effort. Now… you just need to think of a message. xxx

LEAVE A REPLY

Please enter your comment!
Please enter your name here