Many Retailers Not Ready for Holiday Order Fulfilment

Processes that can’t respond to volatile consumer demand in real time and lack of supply chain management talent are top challenges.

Despite growing consumer expectations for perfect order delivery and always-available inventory during the holidays, most (83 percent) U.S. supply chain managers surveyed say it is challenging to adequately plan for supply chain capacity to address peak requirements or timely fluctuations in demand. This was a key finding of Capgemini’s“Supply Chain Impact” survey, conducted online in October 2013 by KRC Research among two audiences – 1,000 consumers nationwide and 150 U.S. senior supply chain managers at retail, consumer products and distribution companies with at least $1 billion in revenue worldwide.

Just 21 percent of the surveyed managers say their systems do an excellent job of providing accurate real-time insights into supply chain performance. Yet, the potential impact of out-of-stock items and order fulfilment issues is clear:

  • 89 percent of U.S. consumers say they are likely to shop with another retailer in the future if an item is delivered late;
  • 73 percent would purchase from a different store than originally intended if they were unable to find an item they wanted in stock this holiday shopping season, and 29 percent would decide not to purchase the item at all;
  • More than half of U.S. supply chain managers (54 percent) admit supply chain issues have had a negative impact on their company’s revenue or profitability over the past few years.

Among the top challenges to maintaining seamless supply chain operations, foremost is having the right processes to respond to volatile consumer demand in real time, which continues to be a struggle for a strong majority of supply chain managers (86 percent). Nearly all report that finding the right talent with the analytical skills (89 percent) or functional knowledge (85 percent) necessary for supply chain management and insights is an issue for their company.

Other key challenges include:

  • Top-down pressure to continually reduce costs and optimize working capital (87 percent),
  • End-to-end visibility and coordination across the supply chain (84 percent),
  • A lack of integration in multi-channel supply chains, in store and online (67 percent).

This year, is projecting online holiday sales will rise between 13 and 15 percent over 2012, to as much as $82 billion. In addition, the National Retail Federation predicts total holiday sales will grow 3.9 percent to $602.1 billion in 2013, an increase from 2012’s 3.5 percent growth in total holiday sales[1].

With the predicted growth in holiday sales, the survey reveals some of the biggest frustrations consumers have when shopping during the holiday season:

  • Retailers delivering the wrong product (95 percent),
  • Delivering an order late (93 percent)
  • Not having an in-store item in stock (82 percent).

Most supply chain managers (80 percent) recognize that consumer expectations for perfect, on-time delivery of their products has increased over the last five years, yet nearly a third (31 percent) of supply chain managers feel their company’s top executives are not concerned about supply chain issues during the holidays impacting revenue or profitability.

“Our research raises concerns about the ability for large, global businesses to effectively adapt their supply chain processes to anticipate and manage the stress of major shopping seasons like the upcoming holidays, including the critical need to maintain the right items in stock and deliver products on time,”said Paul Cole, senior vice president and head of consumer products and retail for Capgemini’s Business Process Outsourcing Division.“As supply chains become more complex and consumers grow ever more demanding, business executives and supply chain managers are increasingly feeling the pressure to improve their operational visibility and responsiveness to market demand.”

To meet increasingly demanding consumer expectations for perfect orders, supply chain managers’ number one priority for the next year is to increase the talent and skillsets for those overseeing supply chain processes (65 percent). Other priorities for 2014 include bringing in best-in-class processes to improve specific business outcomes (55 percent) and better leveraging data and analytics modeling to improve supply chain response to consumer demand (54 percent). According to Cole, these two trends, when taken together, speak to the need for consumer products companies to transform into “Demand-Driven Enterprises” in order to win at the shelf.


[1] NRF and’s 2013 Holiday Sales Forecast:

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.