Imagine you’ve just been appointed to oversee the merchandise and ecommerce sales of the Los Angeles Lakers at the Staples Centre in LA, days before the start of the season, and the Lakers were about to launch an alternate jersey. You know you will have to accept orders regardless of the time and location constraints.
Every customer will want their orders delivered faster than usual. How will you manage the rush? How much should you stock to cater for demand and sell more?
Now you are in a race against time with little resources at your disposal.
You’ll probably panic and employ more hands at the physical store then rush to your old enterprise platform with the hope that it will cater for the anticipated demand. You’ll also incur more logistics costs to satisfy customers. What other options are there for you?
Amy Robertson found a way around the dilemma and she later led one of the most successful jersey sales for the Lakers.
Rather than panic or settle for their old enterprise platform which they quite honestly outgrew, Amy took control, managed the rush, maintained stock and recorded a bumper sale.
“It was one of our most successful jersey launches in terms of quantity sold” she said.
How Do You Manage Rush?
The National Retail Federation says 40% of customers begin their holiday shopping as early as October. Now that leaves a whopping 60% of individuals who will probably put in rush orders in November and throughout the holiday. The survey indicates that almost half of the holiday shopping will be done online.
Image via nrf.com
But a good time for sellers is not always the ideal time for suppliers. Suppliers often face an increased drain in capacity around the holidays. While sellers want timely delivery and inventory tracking synchronized across channels, suppliers may not be able to take the Yuletide heat for the following reasons:
- Complex calculations: One key to managing the holiday rush is predicting precisely how many of each product the retailer will need and in how many locations. Solving the math for the holiday rush is a complex calculation, and the right answer varies so much due to an influx of orders that it presents a challenge for ecommerce businesses catering more than a handful of locations.
- Production-related issues: While your estimations may be on track for the holiday season, there can be disruptions to the vendor’s supply chain due to production delays. As the window is short, manufacturers can’t accurately predict how the window behaves. They are unwilling to throw in too much inventory because if estimates are wrong, they could end up with a pile of unsold batches post-holiday season.
- Last-minute peaks: Last-minute spikes in demand due to sudden promotions often plague suppliers. The basic and enterprise ecommerce shipping model isn’t sustainable for meeting these spikes, and a supply chain network can’t be designed to operate 365 days a year based on these spikes. Without the right discussions upfront, it becomes challenging for suppliers to manage the sudden surge.
The challenging environment presents ecommerce retailers with a startling reality: How to effectively overcome supply chain issues and manage holiday rush. Early planning will make things smooth, but it requires greater effort.
Here are some tips on how to manage rush this holiday:
1. Go for an Enterprise Solution That Can Manage Thousands of Orders per Minute
If you don’t know how frustrating an ecommerce platform that crashes at the instance of product release traffic can be, ask Justin Hiltz. Justin is an executive at Johnny Cupcakes (A clothing brand founded in 2001 by Johnny Earle). With custom built ecommerce software, they could barely manage product release traffic.
They came off to customers as unreliable until Justin made the big switch to enterprise level platform.
As the holiday influx begins, how capable is your enterprise solution? The first big move to managing last-minute orders and the inundating rush to deliver this holiday is making sure you have an enterprise solution that takes away the burden of managing orders.
That was Amy’s big secret! They achieved success with the Lakers jersey launch because they chose a platform capable of taking as many orders that came. A great step towards achieving that feat was to admit that the store needed a change.
“We were using a platform that, quite honestly, we outgrew” she said. So they decided to scale up and went for a trusted solution for enterprise level retailers .
So did Jonathan Bayme of Theory 11 who sought help after a Magento disaster. After cycling through five ecommerce solutions in as many years, Theory 11, which creates and sells magic products and videos, needed help.
“We processed thousands of orders on Black Friday alone, without any issues of scalability or concurrent connections. We released four new products at once, and Shopify servers faced enormous demand without breaking a sweat. Even at peak moments, we noticed no degradation in load-time throughout Black Friday, our largest shopping day of the year”.
It doesn’t matter how many products you have on display, your enterprise solution should be capable of growing with you like Sean Clark’s ShoeMe grew with theirs. Prioritizing and delivering orders with the same quality and standard customers expect sets you apart.
2. Scale up Logistics
It is expected that average spending per person this holiday season will hit $805.65, according to a National Retail Federation 2015 survey. Your store will have no share of this largesse if you fail to scale up logistics.
More so, the survey predicts that almost half of holiday shopping will be done online and this will most definitely put logistics in demand.
Your regular logistics cost may skyrocket especially since the survey says 93% of online shoppers are anticipating free shipping this holiday.
Image via Compete.com
With your goal to sell more this holiday in mind, how will you scale up your logistics albeit temporarily?
Imagine you have more than 10,000 orders to fulfill in days. As you battle to pack the orders, you realize your logistics provider is grossly overstretched. And sadly, you have given out free shipping on some of the orders. To solve the problem, you prioritize the orders separating them into two groups: regular orders and rush orders.
So your store accepts both regular and rush orders. You typically deliver both categories of orders through the same route (or logistics provider) giving priority and more logistics resources to rush orders.
But with the rush, your current logistics arrangement will not cut it. You need to scale up.
According to Arisha and Mahfouz’s research on rush order risk, it was found that your current mixed strategy will increase your delivery time by 35% and average cost by 25% during a rush.
Image via dit.ie
That is bad for business this holiday. Rather than prioritize orders, dedicate your rush orders to a capable logistics provider and have your regular orders go through alternate channels.
A service you could use if you have significant presence in New York, Chicago, or San Francisco is UberRUSH.
Now is the time to review your logistics options. With a combo of Shopify and UberRUSH, you can now deliver your online rush orders in hours. This makes you better prepared for last minute online shopping and boost impulse buying this holiday.
Having this in place will help your store deliver your regular orders 37% faster and 17% less expensively. While rush orders will be better managed 40% faster and 27% less expensive, according to the research.
If your store or your logistics providers’ shipping hub is not at close proximity, is this the time to relocate your store? Hell no!
You should seek a temporary store close to your preferred shipping hub or opt for a logistics provider with a shipping hub close to your store. Proximity to a shipping hub will help you have your orders shipped faster leaving you with ample time to prepare and pack more items to sell more.
This is the secret of the big retail stores that make rush jobs look easy.
You are in luck. Now better than later is the time to push for this option for the holiday influx. The NRF survey indicates that 46.5 percent of online shoppers will take advantage of retailers’ ‘buy online/pick-up in store” or “ship-to-store options’.
Here’s what Matthew Shay, NRF President and CEO had to say about that:
“In an effort to attract all shoppers – from the extremely price sensitive to the online millennial, retailers will be offering exclusive incentives, low prices, price-matching, top toys and everyone’s favorite - free shipping and buy online pick up in store offers.”
Having an efficient ecommerce enterprise solution to manage the orders while you pack the orders for customers to pick up will help you sell more.
Your cycle time for logistics is expected to become shorter as you offer customers the ship-to-store for pick up option as opposed to ship-to-home. Putting this big move in place can help you consider offering free shipping to online customers and have about 93 percent of them buy more from your store this holiday.
As the orders begin the fly in with your enterprise solution and logistics water tight, what next? Maintain stock.
How Do You Maintain Stock For The Holiday Sales?
Yes, you heard right. It is true there will be massive sales this holiday.
In fact, here’s what Shay had to say:
“We continue to see positive momentum in retail sales growth, giving us reason to believe consumers will show up this holiday season as they look to take advantage of all of retailers’ promotional offerings.”
You have to maintain stock levels to stay relevant for this move.
Unlike Amy who may have had the luxury of overshooting inventory considering the store had the entire season to sell the newly launched Lakers Jerseys, you don’t.
You don’t want to be weighed down by an oversized inventory at the end of the shopping spree season. So you must stock the right products, in the right numbers. Doing the calculations for the upsurge is a daunting task. The time is short, expected sales volume is high. Do you go all out bringing a bunch of inventory?
Here are tips to help you maintain stock for the holiday influx so you’re not afraid to see January.
1. Turn to Your Ecommerce Enterprise Solution for Powerful Insights
Having an enterprise solution that is able to identify buying trends for big retail stores would do you good. It tracks sales of products at different store locations over a period then uses the accumulated data to estimate future demand.
Enterprise-grade software has the capacity to help you review your stock and understand customer’s choices. Advanced options feature detailed reporting and analytics to help online retailers see further and understand customers better.
With insights from your ecommerce platform, here are some tips that will help in maintaining stock this holiday:
If you want to get it right with your stock control this season, identify a predetermined minimum stock level for each product. Review stock levels daily as the orders begin to rush in and re-order when stock levels reach the minimum mark.
Consider Drop Shipping
Even if you have a big retail store with products stocked to capacity, you certainly will not have all the products your customers need in stock.
Now you want to display and sell products to online shoppers with a reduced cost of logistics? Connect your supplier to your customer through drop shipping to boost sales even further.
Practice First In/First Out for Fast Moving Products
A significant move to staying above the pressure from holiday influx and maintaining stock of perishable items is to sell using the first in, first out principle.
As orders are made, you do your business a world of good by simply selling off your oldest stock, helping you control your inventory.
2. Manage Space and Suppliers
As wholesalers and suppliers will begin to churn out items, the relationship you have built with them will be put to the test, so be prepared. Whether you manufacture your products or source from suppliers, have arrangements ready for an air cargo for your imports logistics in the event that production or supply is delayed.
It becomes imperative to manage suppliers and storage space during the holiday crunch than any other period to maintain the most in-demand stock. As a build up to the holiday influx, your store needs as much space as you can get for inventory.
Here are tips for managing space and suppliers for more sales this holiday:
- Consider letting go of some slow-moving stock by returning items to suppliers to free up space.
- You may also try to sell slow-moving items in a flash sale just early enough to have space for the predicted in-demand items before the holidays.
- Determine how long you will need for re-ordered stock from suppliers to arrive.
- Negotiate favorable terms of payment with your supplier so you don’t run of stock during the rush.
- Consider holiday handling. Augment staff with temporary workers especially at the warehouse to move items faster. Big retailers know that systems used to store, move, and direct the flow of goods inside a logistics facility provide low-hanging opportunities to better manage the year-end rush.
The holiday season is here already. 40% of customers have already done their holiday shopping in October; it is now a race to finish. Are you prepared for the rush? Now is the time to gauge your enterprise solution or lose out on the $805.65 customers are willing to spend.
Make the big move now. Scale up your logistics to offer the best order delivery deals. Maintain your stock, sell more, sell off and smile to the bank or sit on a pile of stock in January. The choice is yours.