- Simplify your packaging and packing materials for less friction during holiday surges.
- Work with your 3PL on special holiday customizations.
- Accurately forecast and manage seasonal inventory.
- Iron out the details now for any gifting options (wrapping, customized messages).
- Create pre-built bundles for holiday promotions.
- Don’t wait until the last minute to streamline returns management.
- Research any holiday trends or predictions as the economy can shape buyer habits.
This is one of a four-part series on how to prepare for Q4.
Christmas in July?! For ecommerce companies, yes, this is the time of year to start taking action on your holiday fulfillment plans. While Q2 should be all about strategizing for the busiest time of year, in Q3 you should be talking with supply chain partners about your Q4 plans.
Any changes or additions you want to make for the holidays might take a few months to implement. If you want to wow your customers with special packaging options, generate higher AOV (average order value) with gift wrapping, or net more sales with promotion bundles, you’ll need to start working with your fulfillment provider now to set up those value-added services.
We’ve put together a quick list of popular holiday services that require advanced planning. If any of these interest you, start working on them now in order to have a smooth and successful holiday season this year.
Maybe you have very simple packaging to save on costs throughout the year, but you want to create a really special unboxing experience for the holiday season. Adding new, branded packaging is no small feat and will require a lot of extra work (and probably also money).
Branded packaging can create bottlenecks on the fulfillment side of things especially during a surge. It can also add storage costs (if boxes need to be stored differently), reduce how quickly you can get orders out of the door, and increase your cost per order (if any manual assembly is required). The benefits of using special packaging may increase customer satisfaction and heighten brand feel—however, neither of these are especially easy to track or quantify. So if you’re planning to go the extra mile on seasonal packaging, make sure it’s going to be worth it.
If you’re having trouble managing your inventory, some 3PLs provide the value-added service VMI, or vendor managed inventory. You’ll be able to store your products, and packaging, in their warehouse—it’s more costly, but you’ll benefit by having products closer to fulfillment, plus analytics will be all under one roof.
It’s best to talk with your 3PL about your desires, and listen to their expertise on what might work the best to get the effect you want. They will know which packaging items will cause less friction on the line (branded crinkle paper, versus custom tape, versus unique boxes). For example, your fulfillment provider relies on any automation, using custom boxes or adding special dunnage can slow down the fulfillment lines considerably. If manual production is needed during the holiday surge, that’s not something you’ll want to drop on your 3PL last minute. Having these conversations now will ensure everyone knows what to expect, and you’ll be able to test out how the special packaging moves through the fulfillment process.
Everyone loves getting a present, and gifts feel particularly special when a little effort is put into the presentation.
There are a few popular gifting options when it comes to fulfillment. These are considered value-added services that not all 3PLs provide. Now is a great time of year to start asking your 3PL about their gifting capabilities to get everything established for the holiday season.
A gift wrapped product can either be sent directly to the recipient, or handed off in person. Either way by providing gift wrapping service you are offering your customers a valuable time saver. Plus if your product comes out of the box ready to be given, that’s a big win on the satisfaction meter.
Most often the customer will pay an extra fee for gift wrapping. This makes it a great way to mark up the value of your product and increase your AOV.
If you’re looking to make some small seasonal updates to your customer’s unboxing experience, altering your packing materials is the way to go. Many companies choose to introduce these changes to correspond to a holiday that’s important to their brand, or during special promotional periods.
As stated above, branded packaging materials are great, but they come at a cost. Ask your fulfillment provider which materials can be easily added without causing any bumps in the fulfillment process. You can likely add really beautiful seasonal touches to your packaging (to make them feel festive!) without having to redesign each detail.
Adding a personalized message to your package is becoming more popular. Not all things lead back to Amazon, but adding customized messages in the fulfillment process definitely does. Amazon has made it so simple to add a custom note to any package, and many retailers have followed suit. However, the custom messages allowed by Amazon and other retailers are bland, similar to the ubiquitous Amazon shipping box they arrive in. For a smaller business outsourcing fulfillment to a 3PL this type of value added service might only be available for project-based work (like during the Q4 holiday, for example).
Similar to gift wrapping, some companies choose to tack on an added cost for custom messages. It’s a great way to increase the AOV and also give your customers something fun to interact with as they buy your products for themselves and their loved ones. At DCL Logistics we love helping our clients execute exactly what will help keep their customers happy. Our client Aftershokz did a gift messaging campaign during the 2020 holiday season and it was very well received. Read the case study.
“It took over two months to plan, which is actually a relatively quick turn around for this type of project. It was really something big—we sent thousands of gift messages over the course of our holiday sales. It’s great, it’s an upsell. It elevated the customer experience and ultimately increased our profits.”
Kitting and Bundling
A proven way to increase sales is to offer a discount on items purchased together. This is known as bundling or kitting (they are slightly different, but very similar). The most classic American example of bundled products is the “value meal” where you can get a few items for less money than if you purchased them individually. The same psychology works for ecommerce companies, and if you’re not bundling your products for promotions, you might think about starting this holiday season.
Do you know the difference between bundling and kitting? Get the full breakdown here.
If you want to bundle products together, some examples include: adding accessories for a lower total price; including his/hers options together; partnering with other brands (ideally with the same fulfillment provider) to provide consumers with a special duo of complementary products.
Kitting is a slightly more specific version of bundling. Usually offered in tandem with assembly, kitting means adding multiple products together in a sequential order to create a unique SKU. Kitting is often done with products like subscription boxes, assembled products, or built-to-order items. If you want to provide your customers with a very special holiday assortment of goods, you’ll want to talk to your 3PL soon about their ability to kit.
More advanced 3PLs offer “virtual bundling” which allows sellers to go live with an unlimited number of bundles made up of an unlimited number of SKUs. This allows the sellers to create bundles on the fly to test which offers convert the best without worrying about physically pre-bundling SKUs. Your 3PL should be able to systematically manage the inventory you’ll need for these so you always have inventory reporting and no stockouts.
“Being able to bundle products virtually was the biggest lifesaver! Before we could create virtual bundles we had to pre-kit all of our variety pack box options. Between the transit time to get new products to the warehouse and then building the kits, we were struggling to keep up with orders. Creating bundles in eFactory gives our customers the freedom to create any variety option, while giving us much better visibility of our inventory!”
For the holiday season, when consumers are looking for deals and gifts for many people, bundling products is a great way to increase sales. DCL Logistics works with many companies to bundle products together all year long. Our brands can create bundles virtually through our fulfillment management platform, eFactory.
You can’t think about the winter holidays without secondarily realizing that increased sales volume also means increased returns. Don’t wait until January, when returns start coming in, to think about your returns management strategy.
A well established RMA process will keep your customer experience positive. Just because they are returning something now doesn’t mean they might not come back for a different item another time.
As part of the returns process, you’ll want to discuss with your 3PL how to handle goods coming back. Do they help with refurbishment? Disposal? Are there expiration dates to consider if you have CPG products?
At DCL, our fulfillment portal eFactory has a complete RMA function that allows companies real-time tracking data on all returns. It’s an important step in managing an ecommerce business.
The Ultimate Goal: Customer Satisfaction
If you’re an ecommerce company looking to really make the most of the upward trend in online holiday shopping, start planning your Q4 now. In order to add any of these value-added services to your fulfillment during the holidays, you want to start the conversation well in advance. Work closely with your 3PL, and other supply chain partners to ensure you’re on the same page. If the 2022 holiday season is anything like 2021, there will be a lot to say for companies who did extra planning ahead.
If you’re looking for excellent fulfillment support, DCL Logistics has a proven track record helping high-growth brands scale. Our ultimate goal is to help your brand maximize customer satisfaction, and we have many value-added services we provide.