Soccer team in a huddle

Why Black Friday Starts On Thursday

November 24, 2014 by Richard Howells

When Santa rides into Herald Square to end the 79th annual Macy’s Thanksgiving Day Parade, so begins the “most magical time of the year” for retailers.

The period between Thanksgiving and Christmas Eve can often make the difference between success and failure, and this year will be no exception. This year, the National Retail Federation is projecting that Americans will spend more than $600 billion during the holiday season.

So what are companies doing to maximize all the days on their Advent Calendar? Here are a few examples.

Black Friday Starts on Turkey Day

While the cleanup of the Thanksgiving Parade is still taking place, Macy’s will be preparing to open their doors to Holiday shoppers at 6 p.m. This trend is being followed by many retailers trying to kick start the Festive Season:

  • Kmart – Opens before the turkey is put in the oven, beginning 6 a.m. on Thanksgiving.
  • Toys “R” Us and JC Penney open before the football games are over at 5 p.m. on Thursday.
  • Target, Best Buy, Kohl’s, Sports Authority and Walmart allow folks a few extra minutes to digest their turkey and open at 6 p.m.
The Dynamic Letter to Santa

In today’s hyper-connected society the informed consumer knows (or think they know) more about your products than you do. They know which suppliers have been “naughty or nice”, and which products are moving to the top of everybody’s Christmas List.

It is critical for manufacturers to have the same – or better – visibility to the same information as their customers, and predict what they are thinking. In this complex environment, businesses need the tools to simplify this mass of information into real-time insight from all available structured and unstructured sources. What products are trending on social media? What is the sentiment analysis? What are the bestsellers in each store, location or region? Creating a real-time picture of actual demand (social data, sentiment analysis, marketing forecast and historical data) enable a holistic view.

Planning the Perfect Gift for the “Customer of One”

Customization of products and demand changes daily and supply chains will be stretched to the max. Only when a clear picture of demand emerges can businesses focus on delivering and targeting the right product, to the right customer, at the right time.

When it comes to S&OP processes, Sales and Marketing must collaborative closely with the Operations & Planning to communicate specific product promotions and plans to ensure that the supply chain can respond to the (hopefully) increased and (certainly) dynamic demand.

Santa’s Little Logistics Helpers

Logistics and fulfillment process will play a critical role over the next few weeks. It is not only Santa’s sleigh that will be working overtime on the run up to the “big day”.  The National Retail Federation has predicted that online sales will jump between 8 percent and 11 percent as the trend for armchair shopping continues.

This only increase the logistics challenges of the Holiday season, and the roads will be filled with more of Santa’s little helpers (AKA the US Postal Service, FedEx and UPS). The U.S. Postal Service will switch to seven-day package delivery after Thanksgiving, as it did last year, to accommodate the increases.

UPS are forecasting record Christmas holiday deliveries and are hiring about 95,000 part-time (vs, 55,000 in 2013) between October and Christmas. It is estimated that the peak logistics day will be December 22, when UPS plans to deliver more than 34 million packages worldwide (vs. an average day of 17 million). UPS is ready to handle this year’s anticipated volume of more than 585 million packages in December – an 11 percent increase over 2013.

Make sure the right products are under the tree

And while we might plan in the perfect world, we execute in the real world. And in the real world you need that visibility into which products are:

  • Trending on social media and letters to Santa?
  • Are being pushed by Santa’s’ in all the malls around the world?
  • Going to be left to be sold in the January Sales?

By gathering and analyzing different data points from social media, machine to machine communications and the Internet of Things, companies can turn insight into action and run simple this holiday season.

Happy Holidays!

Follow me on twitter @howellsrichard

This story originally appeared on SAP Business Trends.
Photo: Shutterstock

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