Shifting and varied consumer preferences, collapsing brand loyalty, even freak weather: as shoppers limber up for the 2023 holiday season, retailers should expect the unexpected.

With “unpredictability” now almost the only reliable constant, flexing the workforce in time to the changing holiday season music has become key to catching passing opportunities while shielding margins from cluttered costs.

For retailers yet to modernize inventory and workforce planning, it’s not too late to layer AI-infused microservice capabilities onto existing deployments, to accurately and efficiently predict and meet demand, come what may.

What questions should retailers be asking?

“Why the Constant Flux in Retail?” — Is the Wrong Question to Ask

Cost of living, inflation, some shoppers returning to physical stores, others continuing COVID-19 pandemic-learned habits of leveraging online shopping — take your pick. As we’ll see in the 2022 holiday season review to follow, for every pattern, there’s a counter pattern.

As shoppers hit the e-carts and store aisles for the holiday season of 2023, unpacking the “whys” behind the flux is moot. By now, the reasons are well understood.

What’s more important is facing the new reality that traditional paths to workforce planning strategies may today lead retailers to a dead-end of missed opportunities.
Here are the kinds of questions retailers modernizing their workforce planning methods should be asking:

  1. Can last year’s holiday season help predict inventory and staffing needs this year?
  2. What if we plan the workforce based on those predictions and they fail to play out?
  3. How can we best leverage inventory and our workforce regardless of what happens during the 2023 holiday season?

In yesteryear’s retail landscape, the answer to question one was a steady “yes.” Those responsible for store and warehouse operations could shape workforce and inventory planning, to some degree at least, based on the previous year’s performance.

In the modern retail context, however, the rules of retail engagement are continually rewritten by cascading socioeconomic, trade, and market factors that overlap in complex ways.

Now, the realistic answer to question one seems a tentative “maybe,” and the scenario hinted at in question two seems increasingly likely.

For the sake of argument, let’s look back at 2022 patterns of behavior and retail performance. What lessons, if any, can retail operations carry into the 2023 season?

2022 Holiday Season: Patterns of Contrast

Let’s run the numbers.

Overall, top-down performance during 2022 holiday season was more or less on forecast:

Deloitte’s annual holiday retail forecast anticipated holiday sales to increase 4-6% in 2022. That prediction seemed to come true, with McKinsey confirming a 5.3% rise in retail sales compared with 2021.

When you zoom into the details, however, you start to see variations that paint a conflicted picture of peaks, dips, and tradeoffs that highlight the opaque challenges retailers face when trying to efficiently plan inventory and staffing in different environments.

Early Start Versus Traditional Rush

When did shoppers start hitting the holiday season e-carts and aisles? Amazon’s seasonal fall event, Prime Day, encouraged consumers to shop early with a 25% percentage kicking off as early as September, and another 25% expected to start in October. And 40% were expected to start shopping in the final two months of the year. (Source: Bankrate)

In-Store Versus Online Preferences

Mastercard SpendingPulse reported that holiday retail sales increased by 7.6% from Nov. 1 to Christmas Eve, with shoppers increasing in-store spend by 6.8% compared with 2021.

On the other hand, referencing a Placer.ai report, Retail Dive noted that Black Friday in-store shopping at malls and big-box retailers saw a drop compared to 2021.

Beating Inflation Versus Holding Out for Last-Minute Deals

The looming threat of inflation drove shoppers to seek out early-season bargains to beat potential price surges.

However, despite the trend of early shopping, many CEOs, including those from Tillys and Best Buy, anticipated a return to the norm of late-season rushes of shoppers in search of last-minute price drops.

Can 2022 Holiday Season Patterns of Performance Help Retailers Steer Workforce Planning in 2023?

Given the contradiction, contrast, and duality from the 2022 holiday season retail performance, the feet-on-the-ground answer seems a non-committal “kinda.”

What’s more certain is that retailers across big box, hardline, softline, and grocery are in the same boat when it comes to challenges of workforce and inventory planning.

It’s simply no longer viable to roll out workforce and inventory planning strategies that are carved in stone, based on last year’s performance.

Retailers that continue with finger-in-the-air inventory and workforce planning are effectively setting an inflexible course toward underperformance and workforce fatigue as store and warehouse teams strain to shift stagnant inventory, losing margin and opportunity to blind spots that emerge as the holiday season unfolds.

In contrast, retailers that implement the right workforce planning tools can create order amid the retail chaos and unpredictability by tactically flexing inventory and workforce almost in real-time, and in tune with the swells and fallbacks in online demand, store traffic surges, and consumer channel preference.

It’s Not Too Late: Here’s How To Gain Accurate Predictive Powers for Flexing Inventory and Workforce This Holiday Season

Who knows what’s in store for the 2023 holiday season?

What’s certain is that it’s as hard to call as ever. Which is why putting all your strategy eggs in one workforce planning basket will only lead to sub-par outcomes.

Holiday Season Scenarios to Avoid:

  • Major Inventory Hurdles: Overlooking the surge in stocking and inventory management tasks can lead to supply imbalances, causing avoidable stockouts or surplus inventory scenarios.
  • Staffing Inflexibility and Imbalances: Leading to either overstaffing and inflated labor costs, or understaffing and jeopardized sales and service quality.
  • Overtime Expenses: From lacking capability for adjusting shifts to demand, or introducing part-time assistance.
  • Customer Experience Setbacks: Fewer staff means longer checkout queues and a compromised shopping atmosphere, potentially denting store and brand reputation.
  • Missed Demand Trends: Sudden demand shifts, such as those from trending products, become harder to navigate without labor adaptability.
  • Erratic Team Morale: Denying time-off requests due to rigid scheduling can cause upset among individuals and wider teams, plus a knock-on impact on service felt by customers.

For Those Who Understand the Value of “Hedging Your Bets”

Blue Yonder’s order and inventory microservices bring AI sophistication to accurately predicting and responding to erratic demand patterns, for “just right” inventory and workforce allocations that mean you can come out on top, no matter what.

Schedule your strategy call here with a Blue Yonder expert. They’ll explain how quickly you can implement the right microservice, for “just right” inventory and workforce planning this season.