It’s a time of year that elicits joy and giving. While consumers deck the halls and prepare gifts and food for loved ones, retailers are busy with seasonal promotions and their highest order volumes of the year. With ecommerce holiday sales expected to reach between $278 billion and $284 billion this season, retailers must prepare accordingly to make this holiday season a success.
How is your brand preparing for peak season? Explore these peak season fulfillment planning tips to help give your brand the edge this holiday season:
Understanding peak season
Peak season typically refers to November and December, but for many retailers it starts as soon as October and runs through the first week or two of the new year. More than 27% of the year’s retail ecommerce sales occurred in November and December 2022, and retail brands had 90% of their best-selling days in Q4.
An overwhelming influx of sales during the holiday season brings increased pressure - and demand for resources - at every step of the supply chain. From suppliers and manufacturers to warehouses and transportation, every element that impacts an ecommerce brand’s bottom line experiences a shift.
So, what does this mean for ecommerce brands? Planning. Is. Everything.
Planning for peak season fulfillment
In an optimal scenario, it is recommended that your brand initiates planning for peak season 2023 in January. However, if you don't start thinking about the planning process until after August, there is still ample opportunity to prepare for the post-Thanksgiving rush. Here are the key areas that should be the primary focus.
If you’re like most retailers, you’ll see some of the highest order volumes of the year during November and December. Imagine for a moment what that looks like in sales. Now, imagine you run out of stock on your most popular item when customer demand is the highest. Not only are you missing out on valuable sales; you’re leaving eager shoppers with nowhere to turn but your competitors. On the other hand, if you over-prepare, you’ll be left with excess inventory, another costly option.
Proof point: forecasting demand for your products is critical during the Peak Season. By having an idea of the volume you’ll need for seasonal spikes in sales, you’ll prevent detrimental stockouts.
While there are many ways to anticipate increased demand based on calculations found across the internet, the most accurate way to forecast order volume is by evaluating your own data. Analytics tools like Unified Analytics can simplify this detailed process and help you manage inventory risks during peak season. Effective analytics tools will monitor cycle times to understand which SKUs have longer lead and delivery times. It will also compare sales velocity against available inventory for each product to identify hot or stale products. With these types of analytics, you can forecast demand to mitigate the risk of stockouts and excess inventory.
Promotions to boost sales
Retailers are fighting for the attention of eager consumers at every turn during peak season. Without promotions, it’s nearly impossible to capture the eyes of potential customers. Having a well-planned promotional strategy will ensure you’ll see the bounty of peak season from existing and new shoppers alike.
You already know what marketing efforts have worked to boost sales in the past, so scaling the promotional strategies that have proven to be effective at gaining more customers is key. Having consistent messaging and accurate, up-to-date product feeds for shoppers will also be of the utmost importance.
An integrated marketing strategy that includes online store promotions, paid media placement, performance and affiliate marketing, and organic and lifecycle channels, will drive your key promotions and reinforce your message across channels.
Services like Marketplace Management and Feed Marketing are available to lessen the load, by managing pricing, placement, and promotions across thousands of advertising channels and shopping marketplaces.
And don’t forget to provide the best impression possible from the moment a product arrives, by making sure your unboxing experience is in line with your messaging and becomes another step in the promotional strategy.
Strong support team
Having the necessary resources for peak season goes beyond products and supply chain - none of this would be possible without having the staff available to execute your order fulfillment strategy during peak season.
Make sure you have enough in-house staff to handle high volume operations. Cross-training and hiring seasonal staff is essential to account for the increase and to provide back-up for call-ins and no-shows.
Your warehouse and fulfillment centers will also need to be prepared with sufficient employees to handle the year’s highest volume of pick and pack orders. Your 3PL provider will already have staff well-covered, but if they don’t - you’ll want to find a 3PL with the experience and expertise to handle the order fulfillment process with ease during the peak season.
Another area you’ll want to be sure is fully staffed is customer support. From order tracking to problem resolution to returns, customer support is the first line of communication between your brand and your customers. Be sure your team is fully versed in handling all types of customer issues, or outsource your customer support team.
Rally your returns
According to the National Retail Federation’s 2022 data, 17.9% of merchandise purchased during the holiday season was returned. For some, receiving a product and returning it may be a customer’s first experience with your brand. So how do you plan to maximize this engagement? Here are some key considerations.
Create an unboxing experience to convert returns into purchases or exchanges
Exceed customer expectations with a solid unboxing experience. A beautifully packaged product can impact customer perception of your brand, so much so that they may choose to make an exchange or use store credit for a different product, rather than complete a return.
Have a solid logistics plan in place for returns
We know you wouldn't want to disappoint your customers by making it difficult for them to get a refund or return a product. A negative experience with your brand can impact more than one customer - in fact, according to ReviewTrackers.com, 34% of consumers are likely to leave a review after a negative experience.
Take returns into account when forecasting inventory for Q1 of 2024
Even if you convert returns into exchanges or new purchases, you still need to add the returned item back into your inventory. Consider for a moment what a 17% order return looks like for your business. Some products may be seasonal - are you prepared to find adequate storage for the next year, or handle overstock? Other products are likely part of your year-round offerings. You’ll want to be sure to take this into account when forecasting demand for the beginning of 2024.
Optimize your logistics strategy
With the right logistics strategy in place, your businesses can manage inventory effectively, streamline shipping processes, and ensure that products are delivered to their destination on time, no matter how busy the winter season gets. When you focus on an optimized logistics strategy for peak season, you provide customers with a seamless experience that leaves them happy, satisfied, and likely to buy again in the future.
Reliable shipping carriers
Once a product is out of the distribution center, it’s put in the care of any number of shipping carriers as the last mile to your customer’s door. Having a reliable shipping provider with the capacity for an increase in holiday orders is essential.
Make sure to choose a shipping carrier with a reliable track record for peak season, including last minute orders. According to data from ShipMatrix, UPS had the highest rate of on-time deliveries between Black Friday and Christmas Eve in 2022 (97.5%), followed by FedEx and USPS.
Experienced third party logistics providers
The logistics industry keeps the economy moving during the busy season. An experienced 3PL partner will understand the need for optimized shipping routes, which may mean transferring from one carrier to another. Cart.com has a strategic, nationwide network of 14 fulfillment and distribution centers to ship products efficiently and simplify logistics operations. Our optimized fulfillment network has a range of configurations and automation options that enable us to deliver optimal results for clients regardless of industry.
Holiday season demand surcharges
An important factor to keep in mind during the holiday season is the imposition of peak season surcharges or increased demand surcharges by various carriers. These surcharges are levied to account for the anticipated surge in shipment volumes during specific dates. The demand rates for UPS and FedEx can be accessed below for your reference.
USPS has announced that they won’t be imposing surcharges during the peak season in 2023.
Holiday shipping deadlines
Another key piece of information to know during peak season planning is the holiday shipping deadline for each carrier. There is nothing like promising a product will arrive on a certain date during the holidays and breaking that promise - this is often a dealbreaker for new customers. Find the peak season deadlines for each carrier below:
Clear line of communication with fulfillment provider
Changes happen in the world of ecommerce fulfillment, and the holidays are no exception. Whether it’s adding holiday inserts, return info, and promotional items during packing, or new SKUs for seasonal products, having a clear line of communication with warehouse staff is critical. An exceptional ecommerce fulfillment partner will allow you to keep your pick and pack heroes informed on any changes, and keep you in the loop, so you can feel confident in getting your products out exactly how you want them.
Expect the unexpected (or partner with an experienced 3PL) this holiday season
Despite the best intentions during the peak season planning process, something can - and will - go wrong. Having an experienced fulfillment team in place to anticipate risks and respond swiftly to problems will allow your brand to handle whatever the holidays throw at you.
Cart.com has a deep understanding of the peak season fulfillment process. Our leading omnichannel fulfillment and order management tools help eliminate commerce complexity and drive growth during peak season - or any season.
Contact us if you’d like to connect with a Cart.com peak season fulfillment expert for more information, we’re always happy to help!