![]() Many retailers, earlier in the fall, recognized that these challenges were deep and they anticipated that they’d have trouble getting product when they wanted it. Some of the increases in logistics costs can’t be avoided even if you are a smart retailer, so understanding how much of that you can take to your bottom line and how much of it has to be passed along to the consumer-and then thinking about how to do it in a way that’s minimally disruptive to the consumer-has been really important.Īnd then, finally, retailers are thinking about supply-chain triage. Some of that “pull forward” to smooth out the demand curve has been important.Īnother thing that retailers have done is to thoughtfully raise prices. Whereas in some years Black Friday would be the day when the holiday season starts, this year we saw holiday pricing and promotions as early as October. One is around pricing and promotions timing. Sarah Touse: There are a few things that smart retailers have done. Monica Toriello: What are some things that retailers have done that really made a difference in their supply chain or gave them competitive advantage? Google Podcasts Apple Podcasts Spotify Stitcher RSS Retailer strategies and no-regrets moves Hourly wage rates have escalated over 20 percent in the past 18 months, and investments in technology and automation in distribution centers have been elevated and are now at the forefront of most chief supply-chain officers’ agendas. The other issues-such as labor shortages-have been a long time in the making. However, the pessimist might see this backlog last through 2023. For these issues, the optimist would venture that they’d be resolved by the first half or early second half of next year. The good news is that some of the disruptions will pass, such as overseas vessel delays and container shortages. From your perspective, is there one thing that’s the biggest problem? Or are they all equally big problems? There’s been a lot of press about the supply-chain crisis, and it’s been attributed to a host of factors: logjams at ports huge, unanticipated spikes in consumer demand labor shortages and so on. Sarah has coauthored a number of retail articles, including one most recently on how retailers can build supply-chain resilience. ![]() Sarah, like John, has advised a wide range of retailers and consumer-goods players on supply-chain topics. ![]() Sarah Touse is an associate partner in McKinsey’s Boston office. He is one of the authors of a recent article titled “ Retail’s need for speed: Unlocking value in omnichannel delivery.” He works with many retailers and consumer-goods companies on their omnichannel, supply-chain, and fulfillment strategies. John Barbee is a partner based in McKinsey’s Atlanta office. Today, our two guests will share their insights on the range of supply-chain issues and what retailers can do in advance of what’s sure to be a challenging holiday shopping season. As has been reported, there are many reasons for these disruptions, so there isn’t one magic solution for retailers. That seems to be one of the takeaways from all the recent headlines about disruptions in the global supply chain. Monica Toriello: If you haven’t done your holiday shopping yet, it might already be too late. In this episode of the McKinsey on Consumer and Retail podcast, retail supply-chain experts John Barbee and Sarah Touse offer advice to retailers ahead of what’s shaping up to be another unusual holiday season. The disruptions in the global supply chain are the result of a confluence of factors-which means that retailers have to take action on multiple fronts if they want their store shelves stocked and online orders fulfilled on time.
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