The World Cup: A different ballgame for Supply Chain Planning

Excitement is brewing and the temperature is heating up as Canadians gear up for the World Cup: it’s finally here. As a Torontonian, one of the hosting cities, the excitement is real, and at our Slimstock office in Toronto we’ve been arguing endlessly about which boardroom(s) to convert for our watch parties, which meetings to postpone or move, and which countries we’re swearing allegiance to (quite the challenge in a very diverse office).

One thing is for sure: the game is on!

As supply chain planning experts, we also recognise the major challenges of planning for such a big event, where everything needs to be aligned perfectly to be successful during a short time window. Many businesses are trying to secure a piece of the (commercial) pie through branded and themed promotional products, you’ll see a variety of country and football-branded merchandise pop up across the internet and in stores. Besides merchandise, there’s of course the actual event logistics, where thousands of people visit host cities causing increase in hotel bookings, transit usage and of course event-driven food & beverage sales. Food & beverage manufacturers and retailers will likely also see an increase in sales for certain product categories as millions of Canadians gather for backyard watch-parties.

Planning inventory for an event

Majority of supply chain planning (and inventory in particular) for events is a different ballgame (pun intended) compared to traditional supply chain planning for typical sell-through business. A few differentiators:

1. Assortment is often highly customised and only sellable during the event.
2. The event has set dates, so the customer won’t wait.
3. Demand can be highly correlated to performance of your countries’ team, which is difficult to predict.
4. Due to a surge of infrastructure usage, inventory needs to be available when the capacity is there to distribute, not when you’re planning to sell.

When planning for events such as the World Cup, these differentiators change how you make decisions and, in some cases, they are not unlike betting, rather than a traditional trade-off. I’ll discuss these bets and how you can go about them one by one below.

Highly customised assortments

Whether its apparel, food & beverage or other merchandise, it is often customised to either support a country, be football-themed in general, or is part of officially branded merchandise. This customisation has strong drawbacks as the value significantly drops after the event is over. This often calls for margins to be high to reduce the risk of leftover inventory at the short end of its lifecycle.

When it comes to merchandise, we see retailers take two different strategies:

• Assortments clearly linked to the event and
• More generalised assortment with a strong connection to the event.

In the first case, we clearly see the official FIFA Merchandise in their online store with a variety of shirts themed after host-cities and the 2026 World Cup. Unique designs, limited editions, but a very high risk of obsolescence.

On the other hand, we see fashion icons such as Roots and Zara release limited edition football-inspired shirts. If you look at their releases closely, you’ll notice that they are more generic in nature and are in wider-support of the country you’re supporting. This reduces the risk of obsolescence, as the shirts remain sellable and wearable after the World Cup. As they are strongly linked to emotional sales during the World Cup, sales will drop and their value goes down after the event.

To summarise: on one hand we have merchandise which is unique and exclusive to the event. Often a memory for any attendees of the game for which they are willing to pay good money. However, any leftover inventory after the event will be obsolete. On the other hand, some retailers take a more cautious approach with products which will sell more during the event but are generic enough to still be sellable after. From an inventory perspective: margin is your key differentiator here. The higher the margin, the more risk you can take with inventory. More in that below, where I’ll provide a few examples of this decision-making.

Event dates set in stone

With event dates set in stone, being too late is not an option. This often means early inventory build-up to derisk the flow of the event. Much of the inventory being bought for events such as the World Cup is specifically targeted for the event and is 100% at risk of not being sold, much higher than in a typical sell-through business where even product arriving late can still be sold.

This makes timely planning even more important, and significant time buffers are often built-in by design. Still then, mistakes can be made. Zara just released a Curaçao shirt in not only the wrong colours, but also misspelling the country name. Let’s hope their supply chain is agile enough to catch up in the next week or so, but Zara’s first write-off is a fact.

Great performance equals great sales (and vice versa?)

We’re all hoping our favourite teams will do great at the World Cup, but there are no guarantees in life, and especially not in tournaments. When it comes to forecasting for the World Cup, any event or country branded product will sell much more or much less depending on the performance of that country. This is true for merchandise, but also for food & beverages, as a bad performance will likely reduce the number of watch parties: barbecue, TV, and beer sales drop as a result.

This means that forecasters are up for a challenge, and so are inventory planners. Often this is not a case of forecasting but making a bet on inventory. If you know demand can range between 1.000 and 2.000 EA for the product, the margin and probability become the deciding factors. Let’s review a few examples of how strategies can differ based on margin of a product:

Let’s model 4 simple scenarios. We take two different products where we have an 80% margin or a 60% margin. The decision we want to make is how much inventory we should purchase, so the scenario would be low inventory (1,250 units) or high inventory (2,000 units). In this example, we assume the probability of selling only 500 is 10%, selling 1,000 is 50%, selling 1,500 is 25% and 2,000 is 15%. Our inventory decision will thus potentially cap what we can sell. Our goal is to maximise the Expected Profit of the scenario, which is determined by multiplying the probability of the sales by the profit in that sales scenario (e.g. 10% x a profit of $10,000 gives us an expected profit of $1,000). If we sum all expected profits, we get the expected profit for our margin/inventory scenarios.

If we look at the expected profits of each scenario, we notice that in the high margin scenarios it is better to go with more inventory, whereas in a lower margin scenario it pays off to be more conservative. Now is determining the probability of demand in your organisation, but once you do: the decision-model is rather simple.

Planning around capacity rather than sales

The closer the inventory moves physically to the event, the more care needs to be paid to detailed planning. Let’s say you’re in charge of planning football jerseys of the participating countries. You are likely to place large bulk orders, ship to all countries at the same time (or per vendor) and store them closer to the venues. This detail is not enough for the day of the event. In this case we need to know of course the forecast of the event-day, we also need to know when we have capacity to put the shirts in the city which hosts the event, and ensure they are brought into the venue the hours or evening before. This gap between match day and the shipping and stocking of merchandise is something you need to take into account. Just forecasting the sales doesn’t cut it, and arguably the detailed inventory plan is more important than being exactly right with the forecast.

With all that being said

Whatever happens, the World Cup is going to be a great event, enjoyed and loved by many creating memories for years to come. For companies betting on great sales, these will be busy times, but don’t worry: if you don’t have the stock, your competitor will. For us consumers out there: we will buy whatever we see to support our favorite countries.