It is Sunday as we pen this posting and just like many retail and B2C focused supply chains, Supply Chain Matters is working this weekend. This is the weekend prior to next Thursday’s Thanksgiving holiday in the U.S. and Black Friday, the traditional global kickoff that marks the start of the holiday buying surge for both online and brick and mortar shopping channels.

As we predicted in an earlier commentary, this year’s holiday surge will again test the agility and responsiveness of many retail and B2C focused supply chains.  The buying season is shortened this year, with only 26 days between the Thanksgiving and Christmas holiday, vs. a normal of 32 days.  A vast majority of consumers really either economically stressed or remain concerned about economic and political trends. In the U.S. the past 16 day government shutdown, the effects of a sequestration and food stamp budget cutbacks and threat of additional financial brinkmanship by the Congress, have consumers on-edge with conservative buying tendencies.  Across Europe, while the two-year long severe recession shows some early signs of bottoming, continued high unemployment and the cumulative effects of prolonged recession have consumers across Europe also concerned.  The Wall Street Journal recently reported that consumer sentiment has dropped to its lowest point in two years.

Clear signs of these conditions have come from recent financial results from major U.S. and European retailers. In its most recent third quarter financial reporting, Wal-Mart reported its third straight quarter of flat sales in the U.S. and lowered its full-year profit forecast.  Wal-Mart has already declared that it will initiate aggressive pricing and promotions starting this week and through the holidays. Other retailers such as Best Buy, Kohl’s, Target have also lowered their full-year profitability forecasts in anticipation of the need for aggressive price cutting to secure the limited pie of available holiday sales.  And then we have Amazon, which unveiled its latest assault that includes a unveil new Black Friday deal every 10 minutes, with free two-day shipping on nearly two million items.

Industry watchers are forecasting an unprecedented degree of aggressive promotional programs through the end of the year. Readers have perhaps already begun to experience the blitz of emails announcing buying promotions, and the it’s going to get ever more crazy in the next few weeks, especially in the 10 days just prior to Christmas, That is when retailers begin to get a running sense of how sales are faring compared to budget goals. This is also the second year that online retailers can gauge the consumer attractiveness and program effectiveness of same-day shipping options, particularly Amazon and Wal-Mart. Brick and mortal retailers will be stress testing the use of retail stores as either pick and pack shipping locations or consumer pick-up points for goods ordered online.

There is no doubt that supply chain teams will have to be on their game in the coming five weeks since there is very little room for latency or lack of response to consumer buying trends.  Prior investments in responsiveness and broader-visibility to multi-channel demand and multi-tier inventory levels will be put to the test. In some cases, the effects of prior cost-cutting may manifest themselves in industry winners.  Keep in mind that both air freight and surface transportation carriers have had to initiate their own prior cost cutting efforts, and the planning of seasonal shipment peal surge activity may be stressed further this holiday season.

As the expression goes, the race is on and supply chains will be smack in the middle of responding to sales and marketing frenzy in the next five weeks.

Stay tuned.