The first question—flexible, fast response to supply chain events—is a key tactic that can help both retailers and manufacturers move more product. For example, if demand for a manufacturer’s product is hot in the eastern part of the United States but not the West, companies have to make sure they have the right systems in place to see that detect the trend and share that information, and the right processes and logistics to adjust and remedy the situation.

“Companies have to err on the side of flexibility rather than forcing in rigidity,” Haskins says. Of course, picking up on the supply chain signals, interpreting them and reacting is still a monumental personnel and technical challenge for many manufacturers and retailers. “If you’re waiting for the store to tell you there’s a stock out, you’re way too late,” he says.

Cross-Border Shoppers, the Gift-Card Shopper Delay and Other Trends to Watch

Haskins points to a geographic trend playing out this year in cities along the U.S. and Canadian border. Because of the weak U.S. dollar, many Canadians are likely to cross the border to do their holiday shopping. The challenge for retailers with operations in both countries will be where to place their bets on where the inventory will sell better. Wal-Mart Canada recognized this trend and announced in late October that it would sell books, magazines and gift wrap at U.S. list prices during the holiday season to keep Canadians from heading south.

Another trend that retailers and manufacturers need to be aware of is the exploding financial girth of the “gift-card season,” which has seen multibillion-dollar gains in the last several years. A 2006 report from AMR Research noted the trend and its substantial effect on inventory and staffing decisions for the months of January and February, when many people who received gift cards redeem them. Data from Ellen Davis, a communications director at the National Retail Federation, backs that up: Just 20 percent of all gift cards are redeemed within the week after Christmas; the remaining 80 percent is spread over January and February.

The AMR report (“Retailers: Are Your Operations Ready for Gift Card Season?”) urges merchants and supply chain planners to pay attention to this trend. “Retailers that don’t recognize the shift in their business will find themselves overbought in December and underbought in January and February,” writes analyst Michael Barrett.

Barrett continues: “It’s counterintuitive for most merchants and planners to put up big gains in the month traditionally reserved for inventory reconciliations and cycle counts,” but ignoring that shift means leaving dollars on the table. “The supply chain folks will probably welcome any balancing of product flow between the pre- and post-holiday time, so make sure they are in the loop as well.”