With Fall right around the corner and the aroma of pumpkin-spiced lattes in the air, holiday shopping excitement hasn’t quite built up, yet. Not for the consumers at least. But, most of the retail big players, warehouses, e-commerce fulfillment centers, etc., have already started their holiday preparation. Planning for better holiday season fulfillment is paramount for all retailers because over 80% of them have stated that 10-50% of the annual orders happen between Nov.1-Dec.25.
With a massive chunk of annual orders at stake, a slight misjudgment can have the whole company toppling like a Jenga tower. Logistics and fulfillment centers will be the make-or-break move for all companies in this period. Here are a few expectations that retailers will have from the fulfillment/logistics front this holiday season.
Free shipping > Fast shipping
According to Internet Retailer’s 2016 Holiday Delivery report, 60% of the shoppers went for free shipping over fast shipping when given a choice. 91% of the shoppers are willing to shell out more money just to qualify for free shipping.
But that doesn’t put fast shipping on a lower rung.
Radial-CFI’s 2016 holiday report states that 71% of the shoppers expect their order to be delivered within 5 days of order placement. Holiday season fulfillment is even more challenging because the order volume increases aggressively.
But, the main challenge still continues to be on-time delivery. Customers are willing to wait for more than 5 days when the shipping costs are low or free. Regardless of cost, 90% of the responders to the survey expected the shipment before 7 days. And 51% admitted they would stop doing business with that retailer if the shipment isn’t on time. For retailers, delay in fulfillment or poor order expediting could mean loss of business
If you are a fulfillment company, you should be focusing on figuring out a balance between low-cost and speed options to increase efficiency.
Workforce expansion: Your wildcard entry
Holiday-hiring is not a very new term in the retail fulfillment front. Major retailers are notorious for their holiday-hiring moves or lack of it. Labor management needs a lot of attention during the holiday season. In 2016, not only did Amazon Prime add 120k extra people to their workforce, they also brought more delivery partners on board for better order fulfillment.
Retailers tend to bring more shipping partners onboard during this season due to an exponential increase in the orders. If you are a 3PL company, this could be your wildcard entry to the retail business.
For fulfillment companies engaged in last-mile distribution, this could mean expanding your workforce. If you want a wild-card entry, close your open hires before the end of October. You don’t have a lot of time.
Inventory management: Real-time reverse logistics
During the holiday season, retailers focus on having their inventory stocked with high-demand products and organizing it efficiently.
Most of the distribution centers tend to turn a blind eye to returns. It is very important to assess how you are handling the reverse logistics part. If there’s a huge spike in the order volume, there is bound to be a proportional spike in returns as well. Handling as many returns as possible in real-time can be highly beneficial, especially if the returned products are high-demand ones.
Holdback the experimenting
If you have new methods for handling peak holiday orders, try it out way in advance in a simulation. Pre-empting the season will help iron out most of the potential inconsistencies in the process. This is because when the time comes, you would’ve already perfected the new method.
Experimenting during the September-October period brings in a lot of risk for the peak season. It is best to keep them at bay till the holiday season dies down.
A lot of distribution centers and fulfillment companies have many other tricks up their sleeve for the peak season. Here’s are the most used holiday season fulfillment methods, according to Internet Retailer’s report
Other merchants mostly focus on expediting orders, updating back-end management to reduce the order time, and automation.
With Amazon’s one-click patent expiring and a lot of retailers looking to reproduce that in their e-commerce store, holiday season 2017 is going to be a roller-coaster ride for fulfillment companies all over the world. An easy way to surf the hectic holiday season wave would be to make sure you take care of every aspect of customer experience. Bringing more efficiency to the order management system, fulfillment and delivery methods could be a sound way to build loyalty that lasts even after the holiday season ends.