Kendra Scott is ready for the holidays. Chief executive officer Tom Nolan says the company averted a supply chain disaster by ordering its holiday merchandise a full six months earlier than previous years.
“We did collectively recognize there would be supply chain disruptions — COVID-19 was not going anywhere and it was common sense, to us, that it would have an effect on our supply chain,” Nolan said, noting that nearly 100 percent of its holiday supply is in Kendra Scott’s distribution centers. He said the company tried to avoid shipping as much as possible, instead choosing to send product via air to avoid congestion at ports.
While the media coverage around supply chain disruptions and the call to shop early for holiday gifts seems unrelenting, Nolan does not think it will deter consumers from visiting stores.
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“I do think there is a media frenzy and that’s what happens when a challenging topic comes up. I do think it’s real, but I would surmise that it’s not quite as devastating as some would lead you to believe. But it will be for some businesses. People I’ve been talking to are very concerned, they haven’t done as great of a job as they should have been so it will be challenging,” said Nolan, who says he has already heard of some companies renting out commercial planes to fly in product that is stuck overseas.
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But as far as the appetite for shopping goes, Nolan said: “I think there is still a hangover from COVID-19. People are coming out of their shell into a normal life and a big part of normal life is gathering for the holidays. This is the first holiday in two years that could potentially feel normal and for that reason it’s really important for people to not curb their behavior in how they shop.”
While some stores may see short supplies, Kendra Scott “is doing everything we can to educate the customer that, ‘hey, we know this is a real thing in the world, but it’s not a real thing for us.’ We are making sure the customer knows that we are inventory-rich this holiday season and that she or he can come to us and find gifts that they love,” Nolan said.
Staffing — an equally important part of supply and distribution networks as the final handoff of product to the consumer — is another pain point for retailers this season. Nolan said that Kendra Scott also got to work on seasonal staffing early this year with the aim to add 800 temporary positions across its retail stores and distribution centers.
“Our team was very proactive, they got on the job boards and hiring events early and that payed dividends. A large percentage of stores have fully staffed plans for holiday and our distribution center is the same,” Nolan said.
He added that the company did not offer a financial incentive for staffing, and was able to attract workers because of what he feels is the company’s good reputation, as well as its charitable work.
Kendra Scott is betting on the recent introduction of its men’s line, called Scott Brothers, to help buoy sales this holiday season. The brand is also rolling out more customizable features — like on-site engraving for its demi-fine jewelry line. The goal is to eventually have an engraving machine installed at every Kendra Scott store.
But for Nolan, overall this season’s supply chain challenges could ultimately be a positive thing for the wider industry.
“I think innovation will be born out of it for sure. Either innovation in supply chain or how credit facilities loan to companies. It’s capital-intensive, but maybe it does force some of us to think about how to bring our supply chain closer. It’s challenging to manufacture on the other side of the world — there are a lot of barriers with that and I think it’s something a lot of people are starting to think about,” Nolan said.