Whether peak season runs efficiently or is marked by disruption often depends on the strategic decisions made by supply chain leaders. This year, the connection between planning and performance is even clearer. As direct-to-consumer (DTC) operations pick up, peak season becomes busier and more complex.
In fact, 72% of executives report that their DTC sales volume increased over the past year, and the majority of them (82%) are projecting DTC growth of 10-25% in the year to come. These are some of the findings in a recent survey of supply chain leaders, led by Deposco and Retail Dive’s studioID. The new research report highlights what executives are doing to navigate today’s challenges and how they’re preparing for a successful peak season as DTC sales reach new heights, all while global trade tensions and macroeconomic pressures persist.
The choices leaders make when it comes to implementing change and investing in supply chain technology as peak season approaches can either drive operational excellence or expose hidden vulnerabilities. Tactical moves like smart inventory strategies, network diversification, forming the right partnerships and implementing predictive analytics will strengthen operations and improve resilience during one of the most critical sales periods of the year.
Implementing flexible inventory buffer strategies
Factors like tariffs and trade tensions naturally drive companies to seek ways to insulate themselves from supply shocks and price spikes. As a result, supply chain leaders are tasked with optimizing costs while guarding against disruption.
To do this, more leaders seem to be taking a strategic approach to inventory buffering:
- 56% say just-in-time (JIT) inventory has been the most effective strategy to optimize DTC fulfillment costs.
- 34% say that shifting toward just-in-case (JIC) inventory is their response to global supply chain disruption.
- 42% are prioritizing inventory buffers to reduce the impact of global trade tension.
Although deciding between JIT and JIC is never straightforward, the ability to leverage technology for visibility, agility and scenario planning—no matter which inventory approach you take—is a defining trait of successful operations amid volatility. Supply chain leaders need to know what products they have, how much inventory is available and where it is.
Diversifying their distribution networks
To build resilience and mitigate global risks ahead of peak season, many companies are rethinking their distribution strategies.
For instance, half of surveyed companies are diversifying distribution in an effort to reduce dependency on single markets that can cause peak season bottlenecks.
By establishing multiple warehouses, fulfillment centers and/or logistics hubs across various geographic regions, leaders can reduce dependence on a single location, especially when they have real-time inventory visibility across all facilities. With distributed capacity and several backup options available, other locations can pick up the slack when one goes down to keep products moving during peak season.
Expanding logistics partnerships
Surveyed supply chain leaders point to a clear and growing trend: Third-party logistics providers (3PLs) are becoming an important part of how they navigate supply chain challenges.
As companies prepare for the upcoming holiday season, here’s where their leaders are focusing when it comes to logistics partnerships:
- 36% say that over the past year, they have increased their reliance on 3PLs due to macroeconomic pressures.
- 34% pinpoint 3PL partnerships as an effective cost-optimization strategy for DTC fulfillment.
- 36% say they engage with 3PLs to reduce the impact of global trade tensions.
- 30% are partnering with a 3PL to strengthen their distribution network.
Leveraging 3PLs can help brands scale operations quickly, reduce overhead costs as margins tighten, and reduce the risk associated with disruption. Depending on the partner you work with, 3PLs can also connect brands to technology like real-time tracking, inventory management and automated reporting for greater visibility and control.
Applying predictive analytics for proactive planning
Building a resilient supply chain that’s optimized for peak season means incorporating predictive analytics. By harnessing data-driven insights, companies can anticipate challenges before they arise and make informed decisions accordingly.
When it comes to using predictive analytics to anticipate and respond to disruption during peak season, supply chain leaders are currently leveraging this data to:
- Optimize stock levels (52%), which can ensure availability and minimize carrying costs.
- Forecast demand shifts (40%), which can enable logistics teams to adjust based on trends and purchasing patterns.
- Predict consumer behavior (40%), which can ensure that popular items are well-stocked to maximize sales opportunities.
- Monitor and predict global events (42%), which can allow companies to reroute shipments or secure alternative suppliers if they sense potential disruption ahead.
Building resilience for peak season success
Peak season is a true test of supply chain leaders’ strategy, agility and foresight.
Embracing flexible inventory approaches, diversifying distribution networks, forging strong 3PL logistics partnerships and using data and technology in the right places are key to weathering disruption and seizing new opportunities this year.
To learn more about how supply chain leaders are preparing for a strong peak season as DTC sales accelerate and uncertainties remain, download the full survey report here.
