Many months of planning are involved in the November – December sales rush every year. So, what is different this year? Trading will be almost exclusively online in the UK, except for essentials. It starts with the now-traditional Black Friday and Cyber Monday events and runs until after Christmas. Shopping behaviour has been forced to change from part-in-store and part online to mostly online.
Companies have been planning for this busy period for months, anticipating increased sales despite there being less disposable cash about due to job losses and reduced salaries. According to PwC, consumers are expected to spend 20% less during this period coming up compared to previous years. Retailers will be tempted to discount TVs, smart devices, and other gadgets to attract the big spenders, the bargain-hunters and early Christmas shoppers. On the plus side, consumers will enjoy the opportunity to compare prices, avoid crowds and get 24hour access to special deals, so all is not lost for retailers.
Warehouse planning and supporting logistics
Established E-commerce retailers will have already designed their operations to cope with the expected demand. Companies like John Lewis, Argos and Tesco have routines for hiring temporary staff for their distribution centres and logistics operations and have processes in place to support the increase in sales. Amazon and Royal Mail each hire close to 20,000 staff to cope during this 4-week period.
Warehouse and logistics planning includes many hours of collaboration between suppliers and third-party service providers to ensure a seamless operation. Leaders will have focussed on supply chain visibility. The need to know where items are at any given point vs where they are supposed to be is paramount, so that action to can be taken to rectify problems. These companies will have reviewed their track and trace systems and those of their logistics service providers looking for gaps and bottlenecks.
Troubles may arise for companies whose operations have caused them to increase their online presence. Their planning may have been inadequate or too late (not always their fault) and lacking in the necessary level of detail. There is still time to tackle some areas that might cause problems in the next few weeks.
What companies can do now to successfully weather this period:
It is not too late. You can…
Ensure that warehouse systems, processes, tools and resources are more than adequate based on your projections.
Test and re-test the capabilities and readiness of all systems including order management, replenishment and payment systems. Establish manual backup for all systems and processes in case of failure.
Plan required employee resources, both permanent and temporary. Provide the necessary employee support services.
Review plans for temporary staff and have a backup plan for unavailability of any permanent staff. Set up a source of temporary staff to supplement resources. Train all personnel on systems and processes.
Work closely with your third-party logistics providers (3PLs) to confirm expectations, and to understand their capacity and limitations including handling of returns.
Focus on logistics readiness including last-mile deliveries and courier services. Check for additional available capacity in shared warehouses and where to source extra transport, if needed.
Check online ordering and payment facilities include all the features customers require on both online and mobile.
Check the speed and efficiency of ordering and checkout processes. Slow systems cause customers to go elsewhere Customers want to know that they can shop securely. Make sure they feel safe by displaying safety measures.
Establish an effective and fool proof returns process. Online sales have a three times higher rate of return than in-store purchases.
Check that your returns process is clearly communicated to customers so that there are no misunderstandings.
Clear lines of communication with customers to handle delivery problems, faults and failures.
Make your customer service easy to access and responsive to questions through multiple channels, e.g. email, phone, text and chat box.
Avoid overpromising and under delivering, especially with promotions.
Involve Marketing and Sales in supply chain decisions. Any misalignment means unhappy customers
The Supply Chain Consulting Group can help with the unexpected and tackle any unpleasant surprises. Having back-up plans for every activity and professional consultants ready to deal with potential difficulties your warehouse may face.