Can retail supply chains react effectively to phenomena like ‘Barbie’?
Recently, “Barbie” crossed $1 billion at the global box office, making director Greta Gerwig the first-ever solo female filmmaker with a billion-dollar movie.
The effects of the film’s success are still being felt all over. Barbie doll sales are booming, Halloween costumes are manifesting, and pink is reigning. Even weeks later, moviegoers are journeying to the theater — clad in contrasting colors (mostly pink) — to see the reality-questioning comedy, again and again and again.
You’ll notice lines like this, though, in stories about Mattel, the company behind Barbie:
“The toymaker reported selling out of ‘Barbie’ movie-related toys and products, and promised a wider selection of merchandise going into the holiday season.”
That’s right. Even for those most likely to be prepared (in this case, Mattel), it is challenging to respond effectively to a dramatic demand surge like the one driven by “Barbie.” Because whether it’s a broad cultural movement or a brief viral fad, the breadth and depth of consumer demand can be hard to predict.
To prepare, retailers must embrace supply chain systems, solutions, and processes that are built to counter volatility and unpredictability. That way, no matter what happens, you’ll be ready. Even if you wind up needing way more pink than you thought you would.
Eternal Slumber Party: The challenges of keeping up with social media
In theory, social sentiment could function similarly to Google Trends — helping you forecast demand and quickly respond to short-term sensing. Don’t get me wrong. Social media is a potential influence on demand these days, especially via TikTok.
If something like “Barbie” is trending for weeks and weeks, there likely is a genuine interest, and you can, in turn, anticipate greater demand as a result. It’s an element you’ll want to consider.
However, pulling quality data through social listening and viral trends can be a challenge. How do you map social sentiment to a specific product or geographic location? How do you quickly decipher whether the most recent 1,000 posts are positively or negatively discussing your brand? How do you turn social conversation into actionable sales decisions? Typically, low-quality, contradictory inputs make forecasting accurately via social media a pipe dream.
Social sentiment may be more useful in an area like product design, where you can research and build offerings based off real conversations people are having. For those in toy design, cosmetics, appliances and automotive manufacturing, this can be especially effective. Otherwise, while social media should be something you consider, it is not as tried and true as some other supply chain variables and strategies.
Through the Portal: Navigating the real world
Retailers can’t simply hope things will go well; they must prepare for them to not go well, to be massively disrupted. They must work to build risk-aware and risk-resilient supply chain strategies.
According to McKinsey, supply chain risk arises at the intersection of vulnerability and exposure to unforeseen events. To combat this, leaders must focus on five key areas of supply chain strength:
- Knowledge of external information related to risk and disruption.
- Robustness of supply chain capabilities, factoring in potential weaknesses and breaking points.
- Business continuity, ensuring preparation amidst uncertain future events.
- Testing capabilities to review options and plan scenarios .
- Greater visibility so you can quickly understand impacts and act.
Excelling in these focus areas will help retailers make synchronized business decisions, which will improve forecast accuracy, increase service levels, reduce planning cycle times, and boost top-line revenues along the way. This is what it will look like to integrate design, planning, manufacturing, logistics, maintenance, and service processes so you can be prepared for disruption and change well before it occurs.
Stay Off Your Heels: How AI can help embrace a new reality
Of course, artificial intelligence (AI) is a part of the contemporary supply chain conversation as well. I’ve seen supply chain leaders use AI to a few different ends, including:
- Improving demand forecasts.
- Better monitoring of POS performance.
- Optimizing inventory and service levels.
Used well, AI can help brands achieve better outcomes; improving accuracy, productivity, and demand response for the business. Just remember: The information itself isn’t what’s valuable. It’s what you learn from it and how you use it that will truly set you apart.
What lessons will retailers learn from the “Barbie” craze? That is still yet to be seen. But those that take the time and effort to learn them will be a step ahead whenever the next Mattel movie comes along and takes over the world. Will it be Hot Wheels? Barney? Thomas the Tank Engine? We’ll just have to see.
