The busy peak season brings opportunities and challenges for eCommerce brands and their fulfillment partners each year. In an FTI Consulting report, experts predict online retail sales in the U.S. will reach $1.14 trillion in 2023, marking a 10% growth from the previous year. The report also indicates that eCommerce is expected to account for 42% of total retail sales growth. As consumers’ orders and expectations increase each year, brands can optimize their approach for the upcoming peak season by keeping the following focus areas in mind.
Track and Measure Performance
Efficiently navigating peak season requires tracking performance metrics and monitoring key indicators such as inventory management, customer satisfaction, and return strategies. Inventory management is a crucial part of the supply chain, especially during the busiest seasons. This process involves overseeing product tracking, optimization, and movement to ensure consumer demand is met while inventory costs remain as low as possible.
Inventory turnover and accuracy are important metrics to understand while monitoring inventory management. Turnover ratio measures how much inventory a company sells in a given period. Higher inventory turnover usually indicates that a business is selling its inventory quickly and efficiently, which can increase profits. Inventory accuracy assesses the effectiveness of a company’s inventory management efforts by comparing the recorded quantity and type of items in their database to what is physically in their warehouses. Tracking inventory accuracy gives customers visibility into stock levels and helps avoid stock-out instances that negatively impact customer experiences.
Tracking return metrics also provides brands with valuable data about their inventory levels, performance, and customer sentiment. According to Statista, online retail returns accounted for a quarter of the $817 billion spent on retail returns in the United States in 2022. Returns management involves efficiently handling product returns from customers, which includes checking products, restocking, and ensuring the customer is satisfied with their experience. A higher rate of return might indicate problems such as damaged products, delivery of the wrong product to customers, incorrect sizing, and other warehouse or product-related issues. To handle these disruptions and the potential causes behind them, it is essential to have an effective strategy and policy for managing returns.
Utilizing these insights allows brands to improve decision-making and forecasting, minimize disruptions throughout their operation, and enhance customer experiences.
Prioritize Workforce Planning
One of the main challenges companies face during peak season is optimizing their workforce for increased demand. Effective labor management ensures employees are present, prepared, and engaged during crucial moments. This is increasingly important as consumers continue to start their holiday shopping earlier. Though Cyber Weekend is traditionally the start of the holiday shopping season, in 2022, over half of U.S. consumers began their holiday shopping before Thanksgiving, according to Deloitte. Brands should collaborate with their fulfillment partners to leverage their labor strategies, network, and expertise.
Facilitate Transparent Communication
Brands can optimize their strategy by continuously connecting and communicating peak season developments with their fulfillment partner. Daily priorities shift rapidly during peak surges, and open communication through brief daily check-ins can help maintain alignment and adapt to changing circumstances regarding product sales, metrics, regional sales, and more. For instance, if a company recognizes that consumers are gravitating toward buying a particular combination of products, staying aligned with their fulfillment partner enables them to manage inventory, storage requirements, carriers, and custom packaging to meet the demand seamlessly.
Brands that foster transparent communication with their fulfillment partners and customers can mitigate potential risks, build trust, and effectively allocate resources as they work to manage high order volumes. It is also beneficial for eCommerce companies to leverage integrated technology, such as order tracking systems, email and SMS notifications, and mobile apps, to provide customers with real-time updates on their orders and ensure an engaging experience.
It is critical to have a strong fulfillment provider and a well-crafted strategy for success as demand continues to surge beyond expectations each year. NFI eCom is a reliable fulfillment partner helping brands navigate the challenges and complexities of the busiest time of the year. Visit our eCom solutions page to learn more about our experience.