Managing Logistics Peak Season

MercuryGate Blog - Freight Category

Logistics Lessons Learned From the 2019 Peak Season

As the world watched in anticipation of the 2019 holiday shopping season, the National Retail Federation predicted a 4.2% rise in sales, but the timing of the season was less than optimal. The holiday shopping season was six days shorter due to Thanksgiving in late November. And, while six days may not seem like much time, it amounted to nearly one-sixth of the total number of days in the full season, says Pregis.com. Regardless, retailers were still able to realize a 3.4% increase, by working to fulfill more orders, keep costs under control, and provide top-notch customer service. These are perhaps the most crucial components in achieving a successful peak season logistics performance and retail effectiveness. With the demands of faster shipping and the omnimodal shipping environment now threatening supply chain efficiency, let’s take a moment to look back on this past peak season and realize how the amped-up efforts of supply chains could stand as a model for how to approach the uncertainty of disruption.

Consumers Want Faster, Free Delivery, and Want It Yesterday

The holiday shopping season has evolved over the years from a single-day sales event into a weeks-long process. Black Friday is more than just Friday, and the season doesn’t end with the holidays. Savvy marketers are now using peak season as a tactic to drive sales throughout the year, with promotions like “Black Friday of Your New Body Routine Blowout,” and “It’s the Pre-President’s Day Black Friday Event.”
And while some marketers may be pushing the limits of the Black Friday sales mentality, businesses around the world continue to find new and innovative ways to use peak season themes., Businesses are continually working to sway customers into believing that now is the only time they will ever see these prices again. And, while It doesn’t always align with reason, it’s a strategy that does often drive urgency and increased buying decisions.

And, as Greg Zakowicz of Multichannel Merchant points out, peak buying season and the accompanying sales start well in advance of Thanksgiving:

“The Cyber Five (Thanksgiving through Cyber Monday) now accounts for 20% of the holiday season’s ecommerce revenue. But this period has morphed into the Cyber Ten, thanks in part to Black Friday week.
The ten days from the Sunday before Thanksgiving to Cyber Monday accounted for seven of the top online sales days of the entire season, with six of them hitting $3 billion+ in ecommerce sales and accounting for 27% of the total holiday revenue.”

Returns Processes Need an Overhaul

The best-laid plans for logistics peak season must also include improving returns management. While November and December have a reputation for stronger sales, January and February are the months of regret, remorse, and returns. Yes, buyer’s remorse is alive and well, and it will take advantage of your return policies. Not accepting returns isn’t an option for any business that wants to stay competitive, and with return rates of up to 40% according to Precision Software, efficient returns’ processing is an essential component to keeping costs under control.

Even those that have taken the steps necessary to improve returns’ management still need to understand why returns occur. It’s not enough to simply say that January is just a high-rate return month. Instead, understand why customers made those returns. Was it solely the buyer’s remorse, or was it something more? Was it poor design? Was it a damaged product?
Despite the seemingly impractical ability to avoid the returns that go along with buyer’s remorse, it is possible to use data and better understand your customers. The application of data enables better forecasting, personalization of product availability, and improved inventory management. The result is simple: getting products right with the market will lower your return rates through peak season and beyond.

Omnichannel Everything Is the New Normal

While we have discussed omnichannel at length in past blogs and white papers, the 2019 logistics peak season saw a surge in online ordering and in-store pickups unlike any other. Online orders far outpaced in-store sales, and in-store pickups outpaced traditional in-store sales as well. The opportunity for advancement and improved efficiency is simple. Shippers and logistics service providers now need to realize that “omnichannel” is no longer a buzzword. In today’s highly global and customer-driven environment, it’s simply the way the supply chain works. Omnichannel shipping is no longer a “nice to have” aspect of efficiency or even a benefit. It is a basic business requirement.

The Planning for Logistics Peak Season Never Ends

Perhaps the biggest takeaway from the 2019 peak season is the fact that it is still ongoing. The Chinese Lunar New Year is pushing supply chains to move more product and maximize efficiency. At the same time, the coronavirus is forcing supply chains to rethink their strategies to avoid going out of stock and mitigating the potential disruptions caused by changes in air travel and transport.
Once savvy businesses recognize that logistics peak season never really ends, they can be prepared to look for new strategies to address peak season all year.
“Leading online retailers like Amazon don’t solely focus on major shopping days like Black Friday and Cyber Monday; they have big deals and promotional weekends scheduled throughout November and December to appeal to consumers across all product segments. To prepare for a busy peak season from start to finish, fulfillment centers should start months in advance by upgrading their packaging solutions and stocking up on packing materials.”
For example, the use of an automated, configurable TMS that includes integration functions via an API can achieve these goals in one sweep.

Join Forces With MercuryGate to Navigate All Things Supply Chain Throughout the Current Climate and Well Into the Peak Seasons of the Future

The supply chain will always evolve and change. It is the nature of human civilization, and all companies need more scalability, more product accessibility, faster fulfillment, and more engaging ways to connect with consumers. The peak shopping season exemplifies that fact. There’s no question that peak season is a big challenge; the best way forward lies in choosing an established partner for supply chain efficiency through an advanced, comprehensive transportation management platform. The next disruption and demand for more products and efficiency are here. The market is a disrupting force, and like the holidays, shippers and logistics service providers need to take stock of their strategies and make the changes necessary to maximize efficiency and reduce costs along the way.

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