Black Friday was the first stress test of the capabilities that retailers had put into place to address last year’s anticipated crush of online orders and the corresponding avalanche of fulfillment challenges. However, some data showed that 53% of the retailers surveyed felt they did not have the resources to make the operational changes needed ahead of the season, while 48% felt they didn’t have enough time. They had no intention of making that mistake again this year.
Even with the best intentions, however, many retailers are finding themselves jammed by ongoing supply chain and logistics constraints. As Multichannel Merchant’s Outlook 2021 reports, global delivery timeframes have more than doubled; major carriers are increasing their rates and capping capacity, and many regional carriers might not take purely seasonal business at all. Compound this with a shortage of warehouse space suitable for omnichannel fulfillment, and many retailers could be facing a comparatively frantic 2021.
To help gauge if you’re on-track to handle peak season 2021, here are some benchmarks you should have in place by the end of summer.
Inventory visibility. One great strength of omnichannel retail is the ability to spread large quantities of merchandise across multiple distribution centers and retail locations. This multi-node fulfillment approach optimizes product availability by diversifying fulfillment points, and supports greater speed of delivery. But this only works if you have real-time visibility across all your locations.
It’s vital to know where your SKUs are located and how many of each are available for sale. For example, as available stock at one location shrinks, distributed order management (DOM) functionality should route orders to alternative facilities for fulfillment. A full-featured order management system also factors in delivery preferences, shipping time and costs, inventory optimization across stores, and even more sustainable delivery methods to maximize operational efficiency and deliver the best possible customer experience.
Picking and packing. Even with full transparency into inventory, the ability to satisfy customers depends on how quickly and accurately operations can get merchandise out the door. This demands technology, infrastructure and operational excellence. The bar for execution has been raised incredibly high by the premier e-commerce providers.
Additionally, depending on the nature of your products and brand, there might be special considerations in the packaging operation that can elevate the unboxing experience and engender customer loyalty. If so, you will need to allow extra time for training your seasonal staff to execute these value-add services properly.
Shipping. The explosion of online shopping has created a “perpetual peak” that has maxed out carriers’ capacity year-round. There is also a dearth of long-haul drivers. If your e-commerce operations are shipping nationwide or globally from a single location, this can result in a bottleneck that dramatically slows delivery times.
The challenge of finding carriers for the coming season will be one of the greatest hurdles for brands in the upcoming peak season. If you haven’t already, it’s vital that you consider ways to mitigate carrier capacity constraints by looking outside the big three (USPS, UPS and FedEx), and turning to alternative carriers such as smaller, local carriers, if available.
If you can’t secure the capacity you need in advance of the rush, outsourced providers with standing carrier agreements can be a great resource, provided you don’t wait till the last minute to make sure you’re covered.
In-store fulfillment. This was a bright spot of customer adoption in 2021. Some studys found that 67% of retailers who invested in buy online, pick up in store, capabilities saw increased sales, as did 55% of retailers who invested in curbside pickup. Not surprisingly, the popularity of these fulfillment methods made them the greatest challenge for those retailers who weren’t prepared to execute on them.
For the season ahead, 36% of respondents were planning on investing in extra fulfillment capacity.
Returns. One area receiving more attention in the new “digital-first” retail environment is returns. While every retailer wants to minimize customer returns, they are inevitable. According to Narvar, the number of e-commerce packages that were returned in the U.S. increased 70% in 2021 when compared with 2020. To assure the loyalty of your best customers, returns should be considered part of the overall customer experience, with the process as frictionless and satisfying as possible.
Devise your policy now to maximize a positive customer experience while minimizing spoilage. Script the most common scenarios, and be prepared to train up your customer service and warehouse staff well in advance of the peak shopping season.
Scalability. This item applies across all the categories above. While peak season drives increased volume for months, some days are more intense than others. Your systems and processes need to be able to handle those days. Additionally, your operations should be designed and provisioned for maximum peak volume.
If they’re not, you might be able to stagger through the biggest days. Hopefully, your customers won’t notice the strain.
We at ShopShipShake have been working with businesses like yours with fulfilling experiences. We offer one-stop services, including an efficient supply chain, over 10 thousand of China’s suppliers, and more.
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