What can be said about 2020 other than the real test (peak season) is yet to come? Extensive modeling or the clearest crystal ball could not have helped plan for the year we’ve all experienced. Even though the consumer packaged goods market has seen unprecedented growth many businesses are still concerned about how to succeed and thrive with market uncertainly, strained infrastructure, volatile manufacturing, and a “prime” trained customer. Below are 5 helpful tips to succeed in a “peak season”:
1) EXPAND FULFILLMENT THROUGH A PARTNERSHIP
If you’re self-fulfilling Ecommerce orders, make certain to have a clear understanding of the maximum orders you can fulfill on a daily basis. You’ll need to consider not just your infrastructure bottleneck (i.e. pick speed, packing, labeling, etc.) but your labor constraints. There are many Ecommerce and supply chain companies offering peak season incentives like signing bonuses and higher hourly rates, so expect a very competitive labor market. You need the same level of clarity if you’re outsourcing your fulfillment. You need to know right now what your partners’ capacity limits are.
Once you have the facts and a gap exists between your forecast and capacity, there are some options you may consider, including outsourcing to a third-party logistics (3PL) partner to handle all your supply chain needs. Or you may allow a 3PL to handle a specific aspect of your supply chain, either your DTC or your B2B business, returns, or back-orders. This has proven to be an effective strategy during the past year. 3PL providers not only save companies time and money in the short term but in the long term as well. They open capacity for your team to focus on core business functions like selling!
2) AGNOSTIC SHIPPING STRATEGY
Major parcel carriers have already given strong indications that there is going to be a massive bottleneck with capacity in the next month. With only so many sort centers, trucks, and staff, each provider will be challenged to handle the demand caused by COVID-19, retail black Friday deals, and traditional peak holiday volume.
Most carriers have either limited account volume or implemented peak season surcharges to drive behavior. If you have all your outbound shipping with a single carrier, it is encouraged to engaging with other carriers that have been knocking at your door. You might have to pay a little more for each shipment but that’s better than having orders sit on your dock. This peak season you may have to divert from your typically rate-shopping strategy to one that balances volume between carriers and ensures all orders can be shipped in a timely manner.
3) SHIP EARLY AND OFTEN
The later in 2020, the greater the impact will be on transit days. This year will be like no other and it is very likely orders placed mid-December will not arrive before the holidays (unless shipped with shipped priority service).
This is not the year to try and level set volume as delayed deliveries will result in more order cancellations and returns. Get your revenue as early as possible and let your customers know why it’s important to forego the procrastination approach.
4) RE-EVALUATE FREE SHIPPING OFFERS
Everyone loves, wants, maybe even demands free shipping but that doesn’t mean you need to lose profitability. Look at your current offering and compare it to your order history data to see where adjustments can be made. Most companies offering free shipping have purchasing thresholds, e.g. free ship on $50 or more. Where some of these companies actually reduce prices on a select number of fast-moving SKUs to encourage multiple line item orders to hit free shipping, allowing for larger cart value & higher-order net income.
5) RESET CUSTOMER EXPECTATIONS
Even an Ecommerce giant with billions of dollars invested in supply chain infrastructure has come up short with delivering on their fulfillment commitments this year. Be sure your advertised order commitment is realistic.
As the old adage goes, it’s better to under-promise and over-deliver. Be upfront with your customers and let them know the 2020 realities so they can plan accordingly. Once an order is placed and the “post-click” journey begins, over-communicate order status and if it looks like a delay is inevitable, get ahead of the situation, and see what you can do to proactively provide solutions. An honest, upfront, clearly communicated approach is always appreciated and more often than not will increase your customer’s brand loyalty in the long run.
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