Blue Christmas Maybe, But Future Looks Merry

Hidden behind the dreary stories of Christmas to come is the promise of companies using today's doldrums as a training ground for a new business strategy.

Blue Christmas Maybe, But Future Looks Merry

Holidays are bound to be more somber this year, for obvious reasons. That mood has been laying heavy on the economy for months, even before the September 11 terrorist attacks. Consumers aren’t expected to be in a buying frenzy this holiday season, and retailers are preparing for a slump. That’s a drastic change from seasons past, when retailers were known to indulge in their own year-end buying binges, stocking up on inventories to meet unforeseen Christmas demand, both in-person and on-line.

2001 won’t be one of those years. In fact, retailers will be downright prudish this year in their avoidance of sinful holiday excess. The Wall Street Journal reported as early as this summer that “by cutting inventories in advance, retailers hope to avoid a repeat of last year, when the economy went south abruptly before the holidays, leaving them with mountains of unsold goods.”

Humbug! What a dreary story. But hidden behind this mountain of manure was the pony I was hoping for. Apparel giant VF Corporation was reported to be “keeping inventories very lean by using technology to micro-manage what merchandise goes to each store.”

It’s good to see retailers starting to put their faith in the technology MHM has been writing about for many Christmases past. We’ve interviewed technology pioneers willing to expose their backs to slings and arrows to amass outrageous fortune. They knew they were taking a risk because everyone else was waiting for “critical mass” to kick in — that magic number of users in the supply chain who will have done the trial and error necessary to remove the bugs and make it possible for their partners to take the leap of faith — while above a safety net.

Well, apparently some big companies are using this year’s economic downturn to train for that leap. According to an Accenture survey of 150 business executives, 31 percent of those heading large companies plan to use this year’s economic slowdown to focus on cost reduction and gain more sector prominence as the marketplace shakedown eliminates competitors.

“By maximizing their investments in key technologies, businesses can survive a period of anemic economic growth and prepare themselves to thrive once the economy emerges from a slow period,” says William C. Copacino, Accenture’s global managing partner for its supply chain management service line.

The Accenture survey says executives believe supply chain management technologies represent the most beneficial investments, followed by customer relationship management and enterprise resource planning technologies.

And what of e-tailers, whose hopes for on-line technology soared a couple Christmases ago, only to be dashed by lackluster consumer confidence? Well, if anything good has come out of this country’s recent trauma, it’s a focus on security — both personal and informational. Timothy Muris, chairman of the Federal Trade Commission, was in Cleveland recently to discuss the FTC’s aggressive, pro-consumer privacy agenda. There was good news for businesses, too, if they pay more attention to data security.

“Laws against fraud and breach of contract increase confidence in the market and protect legitimate businesses,” Muris told MHM during a press conference. “We will be paying a lot of attention to emerging technologies like wireless, and we’ll probably have workshops on those.”

This year the supply chain has extra government and consumer attention. It’s up to you to make that good news.

Tom Andel

chief editor

[email protected]

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