Whether it is the cooler temperatures or the madness taking place in the local mall, there’s little doubt, the Holidays are upon us. While this is the most wonderful time of the year for our family, friends, and festivities, it certainly can be a trying season for any retailer or fulfillment operation. According to internetretailer.com, e-commerce is predicted to grow by 13% in 2013 to an astonishing $262 billion in U.S. sales. With the initial Black Friday and Cyber Monday results, the NRF is projecting on-line holiday sales figures to reach $82 billion. With over 30% of annual on-line sales happening between Thanksgiving and Christmas, the demands and pressures put on the entire supply chain during this time are unprecedented.
The e-commerce explosion is quite impressive and seemingly there is no end in sight for its incredible growth. At the same time, the demands and expectations of consumers are increasing accordingly. In order to feed this consumer demand and expectation, companies like Amazon are announcing revolutionary type of services. In an effort to leverage sales and provide unrivaled convenience to the loyal customer base, Amazon has contracted with USPS for Sunday delivery (currently only in New York City and Los Angeles).
Amazon continues to disrupt the logistics industry with these unique services to differentiate themselves from other online competitors. They understand the primary place to separate your service or company from your competitors is in the actual mind of the consumer. According to retailonlineintegration.com, many buyers will have their first interaction with a brand over the Holiday season. Whether it’s fair or not, the customer experience does not end when the order is submitted. The patron follows multiple emails and tracking numbers through the delivery process, and does not rest until the parcel arrives safe and sound, and most importantly, accurate.
How valuable is this first impression? A study by the White House Office of Consumer Affairs shows that it is six to seven times more expensive to acquire a new customer than to retain a current one. This same study also shows that a loyal customer can be worth up to 10 times as much as their first purchase throughout the year.
Realizing that there is a direct impact on future revenues, accurate and timely delivery during the holidays is the first step in improving the fulfillment services of your company. A concentrated effort during the Holidays in consistently improving the internal processes within the fulfillment center will provide positive forward equity throughout the following year.
To ensure a higher level of order accuracy during this Holiday period, there are some key steps you can take to streamline your fulfillment operations. Just like any successful business venture, everything begins with a plan. Your operation must initiate a forecast for the current year sales based on last year’s volume. Recognizing the peak days and weeks of the holiday season for your products will allow managers to allocate the appropriate resources to pick, pack, and ship accurately. Obviously, your warehouse pack stations have limits. With the proper planning, you can handle the order spikes of the Holidays by taking advantage of opportunities to pack orders through alternate processes. Ensuring that enough resources (scanners, carts, totes, etc.) are on hand to support these peak times is imperative to avoid bottleneck situations. Backlogs and untimely deliveries directly correlate to poor customer experiences.
One of the biggest challenges during this time of the year is staffing. Again, forecasting will allow you to know how many people to hire, what qualifications will best suit the needs of the center, and what management elements to integrate within the center. Recruiting, training, and managing these workers should be done in the most cost-effective manner possible. The additional staffing during the Holiday time will allow the fulfillment center to avoid backorders, handle returns, and reduce the impact of peak days on your permanent staff and resources. It will also enable the company to process the peak orders in a timely and accurate manner, which will ultimately leave a great first impression in the mind of the consumer.
While the holiday season poses a tremendous opportunity for your business, it is imperative for your fulfillment operation to be prepared and to optimize this temporary rush. “American consumers are willing to spend more with companies that provide outstanding service…ultimately great service can drive sales and customer loyalty,” according to Jim Bush, Executive VP at American Express. Remember, potential loyal customers are lining up at your door during the Holidays. Delivering their order in an accurate and timely manner is the best way to ensure they come back repeatedly throughout the year.
At Barrett Distribution, we develop customized supply chain solutions for established companies and new online brands. To learn more about how Barrett Distribution can help with your fulfillment and logistics services, click here.