Supply Chain Blog

RTM New Year Sales Tactics for Electronics & Telecoms Producers

Posted by Dave Jordan on Thu, Dec 05, 2013

The year-end Christmas rush is about to gear up once more. Despite the ropey economic conditions people will still find ways to spend as much money as possible – that they don’t have - over the holiday build up and the inevitable “everything must go” post Christmas period.

Those in the detergents and personal products businesses probably do not see much of a peak as people do not really wash themselves or their clothes more often but there will still be expensively assembled gift packs on offer. Nevertheless, FMCG, Brewing and Pharmaceutical Supply Chains will undoubtedly be running under pressure and overtime to ensure the optimum volume/value is delivered. This is more concentration in demand than a real stand alone peak event.

Food and drink producers experience a real peak as consumption undoubtedly rises with all the celebration and entertaining events but how much of what is bought is actually consumed? Excess fresh food is destined for the waste bin and immediately off the demand radar but non-perishables can hang around for weeks and months belatedly popping up and upsetting carefully crafted demand algorithms.

Electronics and telecoms producers certainly experience a real peak as the latest gadgets and must-haves are wrapped and gifted to friends and relatives. Of course, everyone knows that all these gadgets will soon be superceded by better/cheaper/faster models but that is a fact of electronics retailing these days.

If the purchasing public actually organised a co-ordinated effort then I see a major risk for the electronics producers and what a shopper coup this would be! Despite knowing that their new state of the art gizmo will be considerably cheaper in the post Christmas sales a vast majority of people still buy in advance for giving on the big day itself. I understand the behaviour but so too do the electronics producers and their retailer cohorts who make a profit at whatever the selling price.

New Years SalesIf everybody and I mean everybody - no dissenters - refused to buy electronic items in the build up to Christmas how would producers and retailers react? Would inflated prices be maintained and taken out of New Year sales campaigns or would they enter into a game of bluff with consumers?  Who would crack first in that instance? Would consumers give up and decide they need that must-have telephone or tablet at any price? Would producers and retailers realise that they need to shift this stock as it will upset the innovation flow out of NPD?

This stock has to move out. Yes, the stock could be downgraded and sold in different channels or in different countries but in that case a large quantity of expected revenue is lost. Year end targets that have been promised and re-promised will not have been achieved and working capital that is losing allure by the day will be on the books into the new financial year. Will sales prices eventually be advertised even if the offers are not as low as expected?

I know such a co-ordinated consumer campaign is unlikely to get off the ground as the desire to give in a timely fashion outweighs the potential savings even though there can be several hundred Euros involved.

Those countries and cultures with Christmas celebrations taking place in early January really do have an advantage, don’t they?

Tagss: Route to Market, Christmas, Dave Jordan, Performance Improvement, Telecoms, Forecasting & Demand Planning, Sales