The holiday season is a critically important time for online sales. Many eCommerce businesses attain almost one-third of their annual sales during the holiday season. This means your online store needs to work twice as hard to ensure order fullfillment is done right.
You’ve analyzed demand, determined inventory, optimized your product listing and even planned promotions. However, order fulfillment is a critical factor, which could make or break a successful season of your holiday sales.
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Why Does Holiday Order Fulfillment Matter?
When it comes to holiday sales, every online merchant faces a lot of challenges in terms of order fulfillment.
They need to figure out how to manage increased inventory, labor costs, freight, payment processing, logistics, and most importantly, the increased pressures of delivering as per customer expectations for low cost/free shipping.
There needs to be an effective fulfillment strategy in place beforehand to streamline holiday operations and simplify the workload to boost holiday sales without compromising on customer satisfaction.
You also need efficient back-end logistics to leave a long-lasting impression on your customers’ minds and make the holiday season super successful.
You need to align every area of your business, especially between supply chain leaders and the marketing team in order to better handle your delivery management process.
Receiving a lot of orders is a great thing, but if you run out of stock, are unable to ship packages out in time, or even fail to deliver gifts to recipients in time, there’s a huge risk of losing your customers and damaging your reputation.
Order fulfillment in such cases could be challenging. Below are a few ways to help you prepare a successful holiday order fulfillment strategy.
#1 Stocking Up
Maintaining the perfect stock is a tricky thing to do. Too much inventory brings high warehousing fees and stockouts lead to dissatisfied customers and lower revenue.
The tips below will help to manage your inventory:
- Analyze previous holidays sales data to predict sales this year
- Determine the number of days of inventory until you expect to run out of it
- Identify common shipping destinations according to the majority of customers’ residences to minimize inventory costs
- Use inventory management software or inventory forecasting tools to analyze historical inventory and sales data
- Diminish excess stock with the help of stock clearance sales
- Communicate about spikes in demand to your third party logistics provider for them to efficiently plan the delivery and support your business
#2 Track Inventory Levels Accurately
Even with the best inventory planning tools, forecasts can go wrong and the unexpected can occur.
For instance, your product could receive an organic celebrity endorsement, get featured in a few major gift guides, or become the must-have gift for a particular age group.
You need to continuously review inventory turnover, daily order performance, stock counts with timely data.
- Examine the root cause for inaccurate estimates and readjust forecasts for the future
- Reorder inventory if sales exceed projections
- Increase promotions if sales are behind projections
- Keep a track of stock on all your stores and fulfillment centers, and transfer inventory from your backup warehouse if required
- If any orders are getting help up, prioritize the replenishment of such products
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Fast Order Fulfillment
After your inventory is ready, it’s time for you to fulfill your customer’s orders. However, holiday sales make the process of order fulfillment much more complex than usual.
#1 Considering Outsourcing
If you handle the order fulfillment on your own, you might face an unusual demand during holiday sales which would be impossible for you to manage.
Even if you hire temporary staff for this phase, it wouldn’t be feasible to keep them post the holiday season. The best way to tackle this is by outsourcing to a third-party logistics (3PL) provider during the holiday sales.
Considerations for Finding a 3PL:
- Having multiple order fulfillment centers to store inventory near customers
- Partnering with a 3PL that delivers on your customer expectations
- Having advanced analytics and inventory management tools
- Hiring a dedicated account manager and the support you need
#2 Choose The Right Shipping Options
It’s challenging to compete with online retail giants in terms of shipping speed. Below are a few ideas to consider:
- Distribute inventory across all order fulfillment centers to save time and money and try to ship from the center closest to your customer
- Experiment with free shipping offers by using minimum spend thresholds to increase average order value
- Leverage ground shipping, which costs much lesser than air shipping
- Upgrade shipping if required
Handling Returns During Holiday Sales
As soon as you start to relax after a busy phase of holiday sales, you might start getting returns piling up.
Customers not wanting their gifts, items that don’t fit, products damaged in transit, and even other cases lead can to returns from customers.
And because the volume of sales is higher during the holiday sales, so is the volume of returns.
#1 Be Prepared
Returns of products are inevitable, especially if your return policy allows for it. Firstly, you need to make a provision for the expected volume of returns based on the data from the previous year’s sales.
Accordingly, you need to create a process that can handle all the returns in the coming season. Communicate your return process clearly across your website.
Aim to automate your returns process quickly and cost-effectively. Provide your customers with a shipping label and tracking information once their return has been shipped.
#2 Monitor Returns
Monitor your returns, what kind of customers are mostly returning the products, or which category of your product is getting returned.
You should get feedback from the returning customers, as to why did they choose to return your product and implement those in the future, to minimize returns.
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You can encourage your customers to purchase something else by offering them special discounts to retain them and maintain brand loyalty.
You can also monitor your return rates and revisit your return policy to determine if you need to make customers responsible for the return shipping costs.
Shoppers who bought most during a sale or free shipping promotion are usually the ones who tend to return the most. Determine how that is impacting your margins.
Preparing Your Online Store For The Holiday Sales
#1 Speed and Server Tests
During the shopping season, a lot of people will visit and browse your website to search for products. Because of the huge online traffic, your site will be under the risk of slowing down or even crashing during the peak shopping season.
Your online shoppers may even tend to leave your website if it doesn’t open within 3 seconds. It’s highly important to keep your website ready for such online traffic.
Regular load testing can prepare you for the busy season. It can determine the reason for the slowdown or crash for you to fix. You can use the following online tools to check for website speed:
- Google – PageSpeed Insight
- Web Page Test
#2 Optimize Checkout
One of the most inevitable challenges faced by online sellers is that even though online shoppers add your products to the cart, they abandon it without making the purchase.
You can optimize your checkout and order fulfillment in the below ways:
- Reduce the number of steps required for checkout
- Make your website and checkout compatible with phones, as most online shoppers purchase from their phones
- Provide all necessary specifications for buyers to feel confident
- Provide free or low-cost quick shipping
- Use retargeting ads to redirect buyers from their social media back to your site to complete their purchases
#3 Aligning Promotions and Sales
You can align your brand with holiday dates like Thanksgiving, Black Friday, Christmas and so on, based on the nature of your products.
Use the below tips for maximizing holiday conversions:
- Highlight holiday sales and promotions in banners on your site
- Create a gift guide
- Add countdowns for sales dates
- Display the remaining number of units of inventory to create urgency
- Incorporate holiday-centric content with product photography and blog posts
Holiday season sales can be a very stressful time for eCommerce merchants. You can either make it big during the season or even fail miserably.
There are a lot of challenges you face during that time and you need to be able to tackle those to be able to generate maximum returns. Along with a lot of planning, precision, execution, you also need a small amount of luck.
Online sales tend to break records every holiday season, and you need to be prepared well for it. Plan and monitor every area, to maximize holiday traffic.
You need to start preparing for your holiday sales way before it arrives and align your departments well with your supply chain. Pre-planned processes will lead your business to successfully fulfill orders.
Tie-up with 3PL so that they can take care of your fulfillment efficiently, and you can concentrate on reaping the benefits of holiday sales.
Following all the above steps will help you achieve an effective order fulfillment process during the holiday sales.