It’s a few weeks into Q4 and peak selling season is ramping up. It’s ideal to plan your holiday fulfillment strategy in the summer, but if you haven’t done so yet, it’s not too late to implement a few simple strategies to help guide you through the holidays.
Once October starts, most people are already researching what they will purchase for their friends and family this holiday season. According to projections by the National Retail Federation, in 2019 sales during November and December may increase between 3.8 percent and 4.2 percent over 2018 to a total of between $727.9 billion and $730.7 billion. For small companies and large companies alike, it can be challenging to handle a tremendous surge in volume while delivering the right products on time and at a reasonable cost to ensure customer satisfaction. Take time now to identify objectives and the steps needed to improve holiday fulfillment.
Build Your Forecast
Hopefully you already have a strategy in place, but if you don’t, it’s still a good idea to make a plan, even this late-in-the-game. Take a look at your sales from 2018 and capture the percentage increase you saw in Q4. Build a forecast model with the 2019 data you’ve gathered so far and estimate what you would sell with a similar percentage increase as last year. If you have little or no historical data, ask around and seek advice from a friend in the same industry.
Try to get as detailed as possible in your forecast—break down volume by sales channel (ecommerce and by retailer) at both a unit and order level. By segmenting your projections you will be better equipped to have more accurate forecasting for this quarter and in the future.
Pro tip: The time between Black Friday to Christmas Eve is the heaviest shipping period of the year, so you will want to model your volume day-by-day during this critical period.
Connect Your Team
Marketing and promotions will play a big role in your sales spikes. Make sure it’s well understood by all departments when your marketing campaigns will go live. You will want to make sure that your marketing team communicates to the warehouse any promotions that will increase order demand. When you team is synced and working together, you won’t be caught with a stockout, plus you will be better able to track which events and announcements drive the best customer demand.
Communicate with Your Carrier
Transit time is critical for holiday shipments. If you haven’t changed your shipping strategy for 2019, it may be too late now. But communicating with your carriers is still imperative.
All carriers will publish a holiday cut off schedule, usually on their website. Understanding their cut-off times is extremely important to your shipping strategy. You’ll need to communicate this clearly to your customers to ensure they have the products they want in time for the holidays. This year Christmas is on Tuesday, which means carrier pickups will need to be scheduled accordingly. Take into account that those three days before Christmas might not be a viable time to expect anything in your supply chain to be moving.
You’ll also need to make sure that your carrier has the capacity in their local and national networks for your projected sales volume. Do they have plans to send additional trucks to pick up your increased volume? Be sure to ask about any peak surcharges or additional carrier pickup fees. Translating these changes, and communicating them to your customers, is key both to optimizing orders and keeping customer service issues low.
Pro tip: It’s probably too late to make big changes to your shipping strategy this year, but it can be a great strategy to note for next year. Expedited shipping can be a great addition to your shipping strategy during the holidays because it allows your customers to receive your products until the very last moment of season. Same-day delivery, in-store pickup, or free returns are also popular changes, but they can be complex and requires a lot of planning. Be sure to research each delivery options and have them in place well before the season arrives. If you work with a 3PL they will be instrumental in helping set these up for you.
Resources, Space, and Materials
Take stock of facility space, equipment, and shipping materials. October may be too late to make big changes, but if you realize that you’re going to run into space issues, you’ll need a solid contingency plan. If you use multiple distribution centers, now is a great time to balance your inventory. By analyzing historical shipment patterns and real-time delivery data you can help minimize shipping costs and delivery times, and increase your customer satisfaction.
Shipping materials such as labels, boxes, and dunnage are typically an afterthought—stock up on these before you run out. Identifying and addressing these needs ahead of time can prevent major headaches at the height of the holiday season.
Third-party logistics providers (3PLs) are optimized to accommodate the ebb and flow of peak holiday season volume, helping to meet customers’ peak requirements without adding overhead costs. If you work with a 3PL be sure to communicate your extra needs to them sooner than later.
“DCL had more modern tools and more of a growth-based, forward-looking business model than some other 3PLs we visited. It was clear that they are a company who is constantly improving, and looking for the next way they can grow their business, and that’s what we want in a partner.”
Hire More Help
You should be prepared to expand your team during Q4. Having extra support can help ensure you have excellent service throughout the holiday season. Sufficient training and cross training will be key to that success. If you are a very small company and cannot afford to hire additional full-time staff, plan to have key people in your network on-call throughout the season—these could be your friends and family, advisors and board members, or a reputable temp agency that you can call on last minute. Above all, be sure to communicate to your core team what you expect of them through the holiday season. Will they be required to work on the Friday after Thanksgiving and also on Christmas Eve? Don’t let them be surprised by that!
Pro tip: Most warehouses run a standard 5 day a week, 8 hour shift. Remember, that there are 7 days in a week and 24 hours a day. In theory, your throughput capacity could be increased by 3x. Use that to your advantage and schedule shifts on off hours or on weekends to meet the increase in volume you have forecasted.
Develop a plan now to give yourself the best chance to execute a successful peak holiday season. This year make a point to track all you data and make notes of any changes you’d like to implement for 2020—it’s never too early to start planning for peak selling season.
If you are considering partnering with a third-party logistics provider we would love to hear from you. Send us a note to connect about how DCL Logistics can help your company. You can read DCL’s list of services to learn more, or check out the many integrations DCL works with to help your business grow.