The numbers are now in, and retailers have made it through another holiday season. Most have lived to tell about it.
There were not as many hiccups this past year as there were during the 2013 holiday rush. A year ago, many online shoppers were disappointed that their orders did not arrive in time to be put under the Christmas tree. This time around, more realistic cutoffs, increased capacity, better spacing of promotions, and a milder early winter allowed most items to be delivered as promised.
Overall, retail sales in November and December totaled $616.1 billion, according to the National Retail Federation. That's up 4.1 percent from 2013, and it helped retailers feel a little better after enduring a rather lackluster year. But the interesting numbers were those for nonstore holiday sales—mostly e-commerce transactions. Those sales grew by 6.8 percent and totaled $101.9 billion. Clearly, e-commerce continues to grow as a sector, causing retailers to re-evaluate their supply chains and how much inventory they allocate to each channel.
One of the topics we will continue to explore this year in DC Velocity is the omnichannel challenge. Our February issue cover story explains how one of America's leading apparel companies, American Eagle Outfitters, is addressing the growth of online sales while at the same time continuing to meet store demands. The company has just built a DC in eastern Pennsylvania that allows it to utilize the same inventory for both store replenishment and e-commerce orders. The technology in the facility, which includes conveyors, sorters, and put walls, results in fast fulfillment to both channels.
It's a strategy that many other retailers are considering in order to reduce overhead and make their distribution more effective. They are finding that changes in shoppers' habits can be a good thing, as it forces them to re-evaluate their distribution processes. The result can be better utilization of inventories, reduced costs, greater efficiencies, and the assurance they have a future regardless of how customers choose to shop.
***
Speaking of change, this issue marks my first time writing "BigPicture." I hope to carry on in providing the informative, topical briefs that Peter Bradley has delivered so admirably for the past 12 years.
While I know many of you personally from my years in the industry, there are many I have not yet met. Allow me to introduce myself as your new chief editor.
I welcome your comments and ideas for ways DC Velocity can serve you better. Our goal is to provide you with the resources you need to be a successful supply chain manager.
If you have an idea for a story or a topic you feel deserves better coverage, please e-mail me at dmaloney@dcvelocity.com.
Gartner, Inc.
