Things to Know & Avoid to Achieve Growth This Peak Season
Looking back on 2022’s holiday season, consumers spent an estimated US $211.7 billion online in the last quarter of the year – up 3.5% year on year. As the 2023 holiday season quickly approaches, e-commerce sellers who are looking to smash last year’s growth targets need to be aware of several logistical trends that will impact their business’s bottom line.
2023 has been a wildly variable year for both businesses and consumers—from inflationary pressures, whispers of a recession to drastic shifts in consumer spending, this year has had it all.
However, growth this year is not all but assured. Certain fulfillment players have dramatically ousted several senior leaders creating major supply chain instability along with a power vacuum that threatens to disrupt e-commerce businesses that are caught in the corporate crossfire.
Not only that, with major pre-holiday events like Black Friday and Cyber Monday only weeks away, many warehouses, couriers, and shipping lanes are about to become inundated with orders that will inevitably lead to supply chain bottlenecks for those caught underfunded, unprepared, and understaffed.
The latest Floship Live brought together experts from FedEx and Zonos to provide e-commerce retailers with tangible action items, stability, and assurances that could be applied instantly to make this year’s holiday season work to their advantage and maximize their growth.
If you haven’t had the chance to watch Floship Live, you can catch up by clicking the button below
Keep on reading to discover some additional insights from our panelists.
2023 E-commerce Holiday Trends
Aside from the main trends of social media marketplaces, the use of AI for product recommendations, logistics digitalization, and a focus on free efficient delivery being at the forefront this peak season, there are a few more trends that e-commerce sellers should take stock of.
Local and hyperlocal marketing and delivery strategies can help businesses cater to regional and jurisdictional variations, preferences, and needs. Localization strategies can be supported with a framework of omnichannel, inventory, and personalization policies to maximize sales. For example, companies may wish to provide online or self-service related mobile applications to enable customers to change the location of pick-up or delivery, or to enable drivers to check and process the requirements of new cargo manifests whilst in transit.
Simultaneously, e-commerce merchants will want to maintain their competitiveness by accommodating the expectations of different customers. To cope with this, e-commerce sellers will need a flexible balanced supply chain to cope with different environmental factors and customer needs. Implementing a “just-in-case” supply-chain model means that brands will have more suppliers in different locations and a greater emphasis on inventory and backup solutions to cope with unexpected disruptions in their supply chain.
By creating tailored approaches and a flexible supply chain approach in each target location, e-commerce brands will solve customer demands whilst facilitating seamless global business operations.
In the webinar, our experts discussed the crucial need for open, transparent, and frequent communication channels between e-commerce sellers and their fulfillment partners. These discussions, encompassing volumes, projections, and SLAs are critical to ensuring that brands are capable of maximizing their revenue streams this year.
One other component that brands will want to discuss with their 3PL partners is their customer experience. Prioritizing customer satisfaction by working collaboratively to optimize operations to ensure accurate, on-time deliveries with easily accessible tracking options will set brands up for success and provide a seamless sought-after experience to their customers.
Omnichannel Inventory Management Strategies
Likewise, an omnichannel inventory management approach is critical to ensuring brands avoid things like product stockouts and excess during the holiday season. When adopting an omnichannel approach, sellers will need to be aware of the need for accurate forecasting. By using historical data and demand forecasting tools to predict future sales, sellers will be able to make informed decisions about stock levels and replenishments.
Similarly, maintaining safety stock levels to act as a buffer against unexpected spikes in demand or delays in supply will also need to be considered. The quantity of the safety stock should be based on various factors such as lead times and demand variability. Both inventory and safety stock levels should be managed and updated in real-time to help prevent overselling products that are no longer in stock and provide customers with accurate information.
Ensuring accurate real-time data across the entire supply chain operations can be made possible with the right software. Leading logistics management software that integrates seamlessly with inventory management software, sellers’ e-commerce platforms, and as well as other key components can drastically help manage supply chains with minimal input. Major logistics software developers have created powerful automation rules that can streamline processes thereby reducing the risk of human-made errors along with a suite of data analytics tools and reports to help identify trends and optimize omnichannel inventory strategies.
As a final note, e-commerce sellers need to remember that a successful omnichannel inventory management strategy requires ongoing attention and adaptation to changing market conditions and customer preferences. Taking the view that it is a dynamic process can significantly impact sellers’ business success and customer satisfaction levels.
Creating Value-Adding Returns Policies
The final tip that will ensure e-commerce success this holiday season is how brands define their returns policy to make it a value-adding component for both their business and their customers.
Our expert panelists discussed streamlining returns processes through returns automations, increasing the return window period, and leveraging omnichannel returns as well as sustainable returns practices to minimize waste all of which in their own way add tremendous value to an e-commerce customer experience.
On top of those components, sellers will also want to consider implementing loyalty programs such as discounts, rewards, or free returns to loyal customers to encourage brand loyalty, repeat purchases, and increase customer satisfaction.
Whilst balancing satisfaction with cost control is a delicate process, the specific adjustments to any returns policy ought to align with the business model, industry, and customer base. To find the right balance, e-commerce sellers will want to regularly assess data to find the impact of their returns policy changes on customer satisfaction and operational costs.
Furthermore, by continuously collecting customer feedback on their returns experiences, brands will be able to improve their processes and identify areas for improvement and cost reduction.
The Holidays Are Coming
With major holiday season events such as Black Friday and Cyber Monday right around the corner, many e-commerce retailers will have already begun making preparations to ensure this year goes without a hitch. Even if there are pre-defined policies in place, a best practice that e-commerce sellers both new and established should seek out is the continual refinement and optimization of both their supply chain operations and customer experience strategies to make them valuer-adding processes and not cost burdens. Leveraging new technological tools and strengthening close collaborative relationships with fulfillment partners will only increase the effectiveness of any strategy to help brands captivate customers and rake in the rewards.