Skip to main content

Apple Watch - Managing "Out of stock"

Apple is credited for a lot of things - the least of which is managing retail operations.

However, that seems to be a key element of product launches with apple these days.




Pre-Orders

Over the period of last 5 years, retailers have embraced online e-commerce in several ways. However, every time they integrated ecommerce with their supply chain, it has caused havoc.

There are several brick and mortar retailers that have horror stories. A lot of them have crossed the path. However, very few have skillfully managed that transition as Apple. 

As always, Apple was not the pioneer here but used it very skilfully.

Apple used pre-orders to gauge demand and fine tune its retail operations and manufacturing to handle demand.

Over a period of time, it has gotten better at it.

Apple Watch - Product options

Apple watch is one of the best product launches I have seen in quite some time. 

It is a new product category. Gauging products by pre-ordering is not easy. Breaking the product into various options helps a lot.

Apple watch is available in 3 varieties, 2 sizes, 5 colours and multiple straps - leading to around 38 options.

Based on the latest data, the lead time for most of options are around 3 weeks. This is approximately the same time that the apple supply chain needs to take it right from manufacturing to the doorstep.

With the various product options, Apple has optimised its input for demand in such a way that its supply chain and retail operations are geared for a demand variation. 

Managing "Out of stock"

Why are these important? 

All of these are important because it is very important to make sure that there are no lost sales because of products going out of stock.

"Out of stock" is a very difficult retail scenario. A lot of retailers tried various forecasting models and a lot of real time inputs to understand and predict demand. 

They plan their capacity and gear their distribution based on forecasted demand. Any retailer knows that their forecasts can be affected by other factors out of their control. 

Hence they also plan buffer and stock more than needed to avoid "Out of stock" situations.

Conclusion

Apple does not worry about "Out of stock" for its existing products. However, for a new product line, it did need to make sure that it can sell a product that still does not have a real use case.

Most of the apple watch purchases are to early adaptors or impulse purchase.

It also needs to make sure that it can get apple watch at the hands of its early adaptors to help sell the apple watch better. 

The way it managed "Out of stock" is very ingenious - though Motorola did try it out with its MotoMaker.

Labels:

Comments

Post a Comment

Popular posts from this blog

The right business model for your product

How would you decide what is the best business model for your product? Deciding on the right business model is very important for the product. It does not necessarily mean what is the price of your product. There could be no price for your product - though that is a myth. For example, we think google or Facebook is free. However, we are never the customers for Google or Facebook. It is the advertisers that are its customers. What we need to figure out when we decide on a business model are as follows: Who is my target audience? Who is my customer What is the price. How is the support model going to work Who are my partners While we do not absolutely need to price a product, we need to understand how we would make money. For example Open ERP does not price its product. However, its product is not the ERP software but really the hosting, service and training that it offers. While pricing is an important part, what is more important is in realising who is you...
Post a Comment
Read more

Finding your target audience

The biggest task of the product manager is to find your target audience. Typically it is a very tight rope walk. You define it too narrowly and you would struggle to generalize the product later. You define it too broad and you would struggle to satisfy a lot of people and the product might not take off at all. There is this awesome post by Dave Mcclure on why Niche target segment works. Blog link here . What he says is mostly right and that is what we did as well. We did it mostly by accident. We had to define our niche because we could only talk to those kind of retailers and get data from them to start developing the data. It did have its upside. We were very clear on what we wanted to develop and we are slowly talking to retailers and adding more scenarios. As we are doing this, we are also talking to a slightly different set of retailers. This helps us incrementally build our product while also generalizing the existing features. In our case, we did not fin...
Post a Comment
Read more

Constructing the Product Roadmap

When I started out in the team, I was tasked out with coming out with a plan so that we can demonstrate the product with real data. The idea was to demonstrate it to our prospect with their own data and win them over. However, when I started working, I found out that what we lacked was not a plan but a vision. I quickly put together a one day workshop with our team and our product owner. When we started talking, we talked about several things and figured out that we needed a plan of various proportions. We needed a plan that could help us one the following: Provide a focus for the long term with near term focus on just one thing Help us talk to prospects on what we are going to do Help us decide on when we would need to focus shift on which function - Engineering , sales etc We also did a quick “Product in a box” exercise so that all of us in a team can practice and imbibe the elevator pitch. We needed this since we had to do this pitch at several levels - Inter...
Post a Comment
Read more