Depending on your role within the organization, you may have a love/hate relationship with peak season. While the time of year, typically highlighted by holidays, is an opportunity for increased revenue, it can also be a challenge for supply chains. The increased consumer demand surges during the last 3-4 months of the year, creating an influx of orders that can result in bottlenecks, inventory shortages and shipping delays.
Even though companies are aware of the potential peak season challenges, many fail to prepare in advance for the added strain on their teams. The following sections provide seven strategies to help your team navigate peak season challenges and maximize the opportunity to generate record-breaking revenue numbers.
When does peak season start?
If you were to ask 10 different company leaders when peak season "officially" starts, you're likely to get several answers.
The truth is, there isn't a hard-and-fast start date for peak season. Instead, for many organizations, peak season is a gradual buildup over several months. Most businesses should start preparations during late summer and expect consumer demand to increase steadily throughout the last four months of the year.
Generally, the busiest part of peak season is from mid-October through December and includes key shopping events, like the Cyber Five (the five days between Thanksgiving and Cyber Monday. Last year, the Cyber Five accounted for 16.2% of US holiday retail eCommerce sales.
What challenges do organizations face during peak season?
Organizations should monitor several potential hurdles throughout the peak season. Spending time in late July and early August creating actionable plans for each challenge can improve reaction times should an issue occur during October, November or December.
Shipping delays
Shipping times are among the most important factors in customers' buying decisions during the holiday season. Many purchase items as gifts for family members or friends, and experiencing delays can drastically harm overall customer satisfaction. While it shouldn't surprise organizations that orders spike during peak season, many companies don't create a contingency plan to mitigate shipping delays.
Inventory management issues
Managing inventory effectively is often challenging for organizations during normal parts of the year. With the added volatility of holiday shopping, peak season poses even more of an issue for companies that don't have an effective way to monitor SKUs across all channels.
Without using historical data to accurately forecast the necessary demand, companies are more likely to experience several stockouts throughout the season or even be left with excess stock come January.
Customer experience
Consumer expectations have increased over the last couple of years, and those expected standards still exist during peak season. Whether during the beginning of August or Black Friday, shoppers want fast, reliable service with a personalized experience.
Many organizations run into resource constraints during this time of year, which results in long customer support wait times, inaccurate orders and poor customer communication.
Increased fulfillment costs
The spike in orders during peak season impacts individual companies and the entire transportation industry. The cost of getting products out the door around the holidays can quickly eat into profit margins as carriers impose peak season surcharges on shipments.
Supplier Issues
Supply chain disruptions can happen at any time of the year, but they are much more frequent during peak season. Since raw materials become scarce and product times lengthen, suppliers can easily fall behind, creating a bottleneck for the purchasing organization.
7 Strategies to stay ahead of peak season challenges
Avoiding all the challenges of operating a business during peak season is impossible. However, your team can deploy several strategies and tactics to help mitigate the impact of the most common issues around the holidays.
1. Outline and prepare for big shopping days
Before making any peak season decisions, it's best to outline any big shopping days for your business. Most companies experience the highest order volume on Black Friday, Cyber Monday and the lead-up to the December holidays.
Creating a detailed plan for promotions, stock levels, staffing and shipping during these key events can help minimize inventory shortages and avoid long customer service wait times.
2. Prioritize your customer experience
While customer experience should always be front and center, it's especially important during peak season. Depending on your company's marketing campaigns, you'll likely attract new customers to your products, which means you only have one opportunity to make a good impression.
Optimizing your current customer journey to create a seamless, personalized experience can make all the difference in turning a shopper from a one-time purchase into a repeat customer.
3. Increase promotions and ads
While many of a company's challenges during peak season revolve around orders and inventory, it's also important to plan how to compete against other companies.
Companies will generally boost ads during the holiday months and run special promotions. To stay competitive, your team should spend time researching and creating targeted ads to capture early shoppers. It's also important to note promotions are great, but they must be matched with inventory and shipping capacity to ensure the fulfillment process is manageable.
4. Optimize inventory management
Inventory issues can derail a good product and marketing campaign. To help avoid the headache of stockouts and overstocks, focus on high-demand products first. By reviewing past sales data and forecasting potential demand based on marketplace trends, your team can ensure the company has enough inventory for priority SKUs heading into peak season.
5. Streamline the shipping process
Regardless of how well your team's current shipping process runs, it's important to have a plan in case shipping delays become a problem during peak season.
Below are a few of the best strategies to streamline the shipping process this holiday season:
- Offer different shipping options (express shipping, same-day delivery, etc.)
- Partner with multiple shipping providers
- Work with a 3PL
- Implement an automated system to manage and track shipments
- Pre-package popular items
- Set up designated packing stations in fulfillment centers for top-selling SKUs
6. Rely on past data for forecasting
If your team has limited resources and time, data analysis is one of the best areas to focus on. By reviewing historical sales data, you can predict customer demand for all of your products and avoid costly stockouts.
Analyzing data should also provide insights into the buying trends and patterns of different SKUs. Understanding what products performed better each month of the peak season will help allocate the appropriate capacity space in fulfillment centers.
Previous sales data can also detail exactly how long shipping took during previous peak seasons. Even if your company is unable to improve the shipping experience, this will still allow you to set realistic expectations with customers this season.
7. Work with an experienced logistics and fulfillment partner
For many organizations, peak season puts a strain on all business sectors. One way to alleviate some of the pressure is to work with an experienced logistics and fulfillment partner like Cart.com.
Many providers specialize in high-volume fulfillment and can assist in multiple areas, including:
- Warehousing
- Access to advanced technology
- Shipping
- Order fulfillment
- Customer service
Cart.com can help you get in front of peak season challenges
Peak season is a time of opportunity for many brands and can help businesses reach their annual revenue goals. However, without adequately preparing for potential challenges and issues, the risk of experiencing stockouts and providing a poor customer experience significantly increases.
One way to mitigate much of the peak season issues is to work with an experienced 3PL and fulfillment provider like Cart.com Contact us today to see how our team is helping retailers navigate the challenges of peak season this year.
