John Murphy, Supply Chain Product Marketing, Oracle
On Sunday, July 13th, when the final whistle is blown to bring the World Cup to a close in the Estádio Maracanã and the fans start their journeys home from Rio de Janeiro, many supply chain practitioners will breathe a huge sigh of relief.
Major corporations and businesses in the host cities of the World Cup in Brazil will have been preparing for the tournament from the moment it was announced that the country would host the world’s biggest sporting event. They will no doubt also have been running rigorous planning and forecasting exercises over recent weeks to make sure they can capitalize on the opportunities that will open up to them as roughly three million football fans descend upon Brazil over the course of the 32 day tournament.
As always, the World Cup promises to unify people from all over the world for a few unforgettable weeks this summer. However, with fans from so many nations attending, and games set to take place across such a wide geographical region, the experience will be anything-but unified for businesses looking to make the most of the tournament. These companies will need to be able to target potential customers based not only on their countries of origin, spoken languages and cultures, but also on the teams they support and the cities they are visiting. At the same time, they will need to segment their supply chains to generate opportunities with as many of these fans over as short a time-period as possible.
Developing a Solid Game Plan
Lessons learned from previous major sporting events, and indeed previous World Cups, will go a long way in helping companies plan for this year’s tournament. With the sophisticated planning algorithms that are built into the latest supply chain management solutions, they should already be well-prepared to make the most of the opportunity of the coming weeks – however wide or restricted this might be. Now is not the time to be looking for additional inventory of football shirts or whistles!
For example, souvenir shops at airports across Brazil will in reality have just one chance to make a sale to incoming fans before they head to the stadiums. Strategic businesses will have spent months planning their inventory and sales tactics to make sure they maximise their opportunities at these critical moments. Effective management of the product life cycle is of the utmost importance in scenarios such as this, where retailers will need to ensure they have exactly the right products in the right place to appeal to fans in a very short time window.
Of course, efforts on the ground during the event will not be so cut and dry. Just as nobody on earth can predict who will win the World Cup, companies cannot predict exactly how three million people will react as the tournament unfolds. Businesses can plan only so far ahead, and will need to able to react to changes in fan behaviour and consumption in near real-time if they want to maximise their revenues.
Staying Alert on the Field
The value of intelligent supply chain planning cannot be overstated, and organizations operating during the World Cup will be able to make judicious projections based on a wider breadth and larger volume of relevant data than ever before. This will be the first World Cup for which the ability to manage big data is truly a pre-requisite for businesses.
Companies can of course draw on intelligence gathered at previous events of similar magnitude, which can then be used to predict patterns of consumer behaviour. Businesses can also tie together information on the levels of demand for particular products or services at early matches with relevant causal factors – environmental conditions, promotion tactics, signage, and other things that might cause spikes or dips in sales – in order to develop successful supply chain strategies for the remaining matches over the course of the tournament.
It is here that businesses can benefit from effective consumption-driven planning throughout the World Cup. With the huge volume of data available to them and the ability to accommodate a very short planning cycle, they will be well-equipped to accurately monitor and react to shifting consumption and demand patterns on a game-by-game, hour-by-hour and venue-by-venue basis. To achieve this, they will have to capture data directly from ePoS (electronic point of sale) resources on the ground and from social media chatter and feed this into their analysis models so they can react with targeted responses in near real-time.
Netshoes, Latin America’s largest sporting goods and leisure e-commerce site, recently equipped itself to do just that. The company has upgraded its e-commerce environment to support growing demand for sporting gear ahead of this year’s World Cup – as well as the Summer Olympics due to take place in Brazil in 2016. In addition, Netshoes has positioned itself to respond quickly to changes in demand over the course of the next few weeks, and ensured that its website will stand up to the enormous levels of consumer traffic it expects to experience.
Tapping into Social “Fan-Demonium”
Access to, and visibility across the huge amount of granular data will only be possible for businesses that have effective communications technologies in place. This year’s World Cup will be covered by established 3G/4G mobile networks and NFC mobile payment technology. Brazil will welcome millions of socially empowered fans who will no doubt be checking in on Facebook and FourSquare, updating their Twitter statuses, and sharing photos and videos on Instagram both during games themselves and whilst exploring the sights and sounds of Brazil. This will put significantly increased demand on bandwidth in a part of the world that is already densely populated, making the task of tracking consumer sentiment exceptionally complex. Businesses that can analyse and react to this immense volume of data signals flying around the country will be far better placed to forecast consumer demand and to quickly adapt their supply chains to accommodate the attitudes and buying habits of fans on the ground.
Running efficient and empowered supply chains will also help businesses ensure they can catch wind of unpredictable trends before their competitors can react. For example, if the “Vuvuzela effect” that swept South Africa during the last World Cup is reignited in Brazil, vendors could quickly ride a wave of fan engagement by stocking up on traditional Brazilian musical instruments and helping the local faithful fill the stands of Maracanã stadium with the sounds of their home country.
Of course, while it’s important for companies to allow for a degree of flexibility in the supply chain, they must beware of relying too heavily on real-time reactions. Accurate strategies developed as a result of advanced planning and forecasting in the weeks before the tournament can help them counter the threat posed by the new and potentially untested infrastructure in the stadia – all it would take would be for the local mobile network to collapse under the high pressure it is expected to endure over the next weeks for companies to be left running blind on what will arguably be their largest annual sales opportunity of the year – and that’s something that none of them wants to contemplate.