Retailers told to be proactive and nimble in formulating a 2021 inventory strategy

When the coronavirus pandemic subsides, the furniture industry is going to look markedly different. The supply shock that started in China in February and the demand that followed when stores reopened after closing for months exposed vulnerabilities from Asian manufacturers to U.S. ports and railways that are only now being changed on the fly to meet demand.

Retailers can prepare for any future changes by being proactive and nimble today, supply chain experts say. Riaz Husein, CEO of Profit Chain, a supply chain consulting firm and a Home Furnishings Association Solution Partner, said every retailer’s supply chain is unique unto their business save for one constant. “There are limited resources to every retailer’s supply chain,” he said. “By that I mean there’s limited containers, limited transportation, and limited labor. The retailers who act first will get access to those resources. So be proactive and act fast or you run the risk of getting shut out next year.”

Getting ahead in this pandemic economy is easier said than done in a time of so many unknowns. Husein acknowledges as much but adds that retailers need to put a plan in place that allows for flexibility. He likened it to staffing in the upcoming weeks. “It’s hard to know going into peak season do you staff up and put all your resources out there for double or triple volume? Or are we going to have (a second) shutdown and don’t want those extra resources?”

That’s where having a flexible plan, one that can grow or shrink in scale to the current business climate, comes in handy, Hussein says. “A good plan allows you to stairstep your way into whatever comes down the road. That flexibility will help you either way it goes.

The key to any good plan in the weeks to come is not to panic, says Garrett Bowman president of Gulfstream Shipper’s Association.  “Try to remember how you reacted when the tariffs first impacted you,” says Bowman. “You didn’t panic then, you shouldn’t panic now,” he said. “Try to  adapt that (mentality) looking forward. You don’t want to react to the moment. Don’t be short-minded. Relax and think long term. Keep your customers in mind every day and keep them happy. The product will come.”

Other tips offered by Bowman and Husein:

Barring future pandemic-related shutdowns, Husein and Bowman predicted an uneven supply chain until the second quarter of 2021. Until then, said Husein and Bowman, retailers are not helpless. They offered several strategies for retailers to employ in the coming months:

  • Expand available products and your supplier options. “Most retailers go narrow and deep when it comes to product,” said Husein. “Think about going wider and shallow to give you more options on product you can get in your store.”
  • Improve your vendor relationships to improve your supply priority. Husein and Bowman said it’s largely a myth that giants like Amazon and Wayfair get preferential treatment for delivery over smaller retailers. “But you should be having more conversations with your vendors right now, communicating with them anyway,” said Bowman.
  • Manage communication and expectations with customers. It’s the same retail practice of under promise and over deliver. “If you tell them three months and you deliver in two weeks, they are thrilled,” said Husein. On the other hand, if you tell them a certain date and keep having to call the customer back with bad news, you might have to offer them money back. And your reputation takes a ding.

Bowman and Husein spoke recently during an HFA webinar on dealing with supply chain issues during the pandemic. Want to learn more about how the HFA can help you grow your business? Get in touch with us! Visit Profit Chain‘s or Gulfstream Shipper’s Association‘s website for more information.

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