Retail supply chain strategies to handle seasonal demand

For retailers, seasonal shift is a delicate balancing act, particularly in summer. It is not just a season; it’s a window of opportunity. From cooling essentials to outdoor gear, the surge in both impulse buys and planned purchases keeps businesses on their toes. Yet, while shoppers are soaking up the sun, retailers are already looking ahead, laying the groundwork for the year’s biggest retail milestones - Thanksgiving, Black Friday, and Christmas.

While businesses must optimise inventory and logistics to meet summer demand, they also need to plan for the holiday shopping rush that follows. Any unexpected disruption - be it an extended heatwave stretching barbecue season into autumn, or a pop-culture phenomenon sparking overnight demand for themed merchandise - can throw even the best-laid forecasts off track. Success hinges on more than just reacting to the present; it requires strategic foresight to ensure supply chains remain agile and warehouses are ready for what’s next.

From sunscreen to snow boots: Building supply chain resilience for every season

As summer starts to wind down, retailers face one of their most complex challenges - the seasonal transition. This period demands precise timing and strategic execution to shift from beach towels to Christmas trees without missing a beat. By August, retailers must juggle three competing priorities: Firstly, they must efficiently clear summer inventory, hopefully avoiding markdowns. Secondly, they need to capture the lucrative back-to-school market, where parents and students seek everything from notebooks to new wardrobes. Thirdly, they must lay the groundwork for the year's biggest shopping season.

Soon, categories like toys, electronics, home furnishing, and winter apparel will dominate shopping lists as the holidays approach. Retailers who navigate this transition effectively set themselves up for a strong year-end, ensuring shoppers always find what they need - whether it’s a sunhat in July or the perfect holiday gift in December.

Demand forecasting in retail

Demand surges present retailers with a complex web of operational challenges that can strain even the most well-prepared organisations.

Inventory management is another key hurdle – balancing the risk of stockouts against the cost of excess inventory in a period where demand can spike exponentially is critical. “Nothing is worse than empty shelves, especially today when consumers may decide to prioritise availability over brand loyalty. At the same time, overstocking leads to heavy discounting, which isn't ideal either,” Ashby added.

Labour management becomes particularly thorny as retailers must rapidly scale up their workforce with seasonal hires who need quick yet thorough training, all while competing with other businesses doing the same.

Cash flow management becomes critical as retailers must invest heavily in inventory months before the holiday sales materialise, while simultaneously managing markdowns on items that aren't moving as expected.

Adding to these challenges is the growing unpredictability of weather patterns, such as typhoon season in Asia, which can severely disrupt vessel schedules. Delays in shipments often lead to late arrivals, forcing retailers to quickly adjust delivery plans to distribution centers and rethink inventory flow.

How can retailers navigate summer’s peak without overburdening their supply chains?

In an era where convenience drives brand loyalty, consistent product availability is crucial. Nearly 60% of global merchants report lost sales from products being out of stock due to sudden changes in demand. Alongside that, 23% of global merchants report damage to reputation, illustrating how retailers must strike a balance between product availability and overstocking.

Here are seven practices retailers can incorporate to handle seasonal demand hikes:

1. From data to decisions: Demand forecasting in retail

   Demand forecasting helps brands ensure the right products are in stock at the right time, preventing lost sales while avoiding excess inventory costs. It uses past sales trends, market conditions, and customer behaviour to estimate how much of a product will be needed in the coming days, months, or even years. Behind the scenes, advanced technologies like AI, machine learning, and big data analytics power these predictions, making them more accurate than ever, transforming how businesses plan their inventory. According to Gartner reports, effective demand forecasting delivers multiple business advantages such as - reduced inventory costs, improved order fulfilment rates, shorter cash-to-cash cycles, and enhanced profit margins.

2. Building diverse and agile supply chains

   Retailers must cultivate diversified and agile supply chains to effectively manage the surge in demand during peak seasons. A diversified supply chain reduces reliance on a single supplier or region, mitigating risks associated with disruptions like natural disasters or geopolitical events. Agility enables retailers to swiftly adjust to market fluctuations, ensuring timely product availability.

3. Inventory optimisation

   Excess stock can lead to 20-30% higher holding costs, while understocking results in lost sales. Therefore, retailers need to balance a just-in-time inventory approach with a just-in-case approach, to support both efficiency and resilience in the supply chain, reducing waste but ensuring product availability.

4. Optimising logistics and last-mile delivery

   To handle the surge, businesses can partner with reliable logistics providers, invest in micro-fulfilment centres, and explore same-day or next-day delivery options. Leveraging technology-driven visibility, supply chain partners and in-house logistics teams can optimise transportation modes, reducing reliance on a single method while enhancing flexibility and cost efficiency.

5. Leveraging technology & automation for real-time data visibility

   Real-time data visibility enables businesses to monitor cargo flows, streamline operations, prioritise critical Purchase Orders if capacity is tight, and detect potential disruptions early. This proactive approach enables businesses to receive actionable recommendations related to choosing the ocean provider, using air freight for part of the route, or adjusting transport modes—all with a clear understanding of cost implications.

6. Workforce planning for seasonal demand

   Retailers often experience labour shortages during peak seasons. A flexible workforce strategy, including temporary staffing, AI-powered scheduling, and incentivised overtime can help manage the rush without exhausting permanent employees.

7. Strengthen communication with partners & suppliers

   Building strong partnerships is essential for supply chain resilience. When organisations collaborate on planning, forecasting, and management, they gain better control over operations and can make more informed, timely decisions.

Balancing efficiency and cost: Navigating the trade-offs in high-demand periods

No business can achieve a supply chain that is both highly efficient and purely cost-driven—there will always be trade-offs. Shorter lead times, for example, improve responsiveness but often require costlier transport options like rail or air instead of ocean freight. Keeping inventory close to consumers ensures faster fulfilment but comes at a premium, especially in high-cost regions like Europe or the US.

Retailers must also weigh simplicity against resilience. Relying on a single supplier or route may reduce complexity but increases risk, while diversifying suppliers enhances stability at a higher cost. Contracting models in ocean freight might allow companies to pre-secure additional capacity for key months like June to September, ensuring availability during seasonal peaks while managing costs within predefined limits.

Beyond predictability: Navigating the shifting tides of seasonal demand

Today's seasonal demand patterns are shifting dramatically, much like climate patterns themselves. The traditional retail calendar has been disrupted by global events – from the Red Sea crisis to tariff uncertainties – forcing businesses to rethink their approach to seasonal planning. Success in this new environment requires more than just reactive measures. Organisations must build comprehensive strategies that combine advanced forecasting capabilities with deep supplier relationships that transcend transactional agreements.

To stay ahead, retailers must develop robust contingency plans, diversify transportation routes, and align all partners with seamless customer service protocols. Flexible storage solutions and adaptable supply networks provide the agility needed to manage seasonal peaks effectively. By fostering deeper, collaborative relationships with vendors, businesses can navigate disruptions with confidence, ensuring shelves stay stocked and consumer expectations are met - no matter the season.

With Maersk’s integrated supply chain capabilities, we aim to help keep your operations running smoothly throughout the year. Explore our logistics solutions.