The most challenging time of the year has arrived for e-tailers. This is because they can bring in more than 25 percent of their yearly turnover in this period. It won’t come as a surprise to hear that the number of online purchases made during this period increases every year. This time also serves as the biggest stress test of the year. During this period, it is important that you make good on the promises you made to your customers since you will be pushing the limits of your logistic capacity.
The figures underline the potential of the end-of-year-period, as does the size of the market share held by e-commerce at this time. In 2014, 40 percent of consumers planned to make their end-of-year purchases online, versus the 52 percent who preferred to go to a bricks-and-mortar shop. Furthermore, 51 percent said they would spend half or more of their shopping budget for this period online. The main motivations to shop online are convenience, free delivery and the avoidance of busy shopping streets.
In order to effectively unlock the potential of the end-of-year period, international e-commerce businesses should make sure they are well prepared from the start. To maximize sales, it pays to offer discounts on price, shipping and taxes; to offer delivery options that are as flexible as possible; and to add temporary marketing banners to all order-related emails customers will receive.
Beyond this, it is also a must to have an overview of differences in shopping habits around the world. Although most consumers wait until December to make their end-of-year purchases, there are certain corners of the world in which some important peaks fall in November. We have compiled an overview of the main ones for you (see frame).
For you, as an e-tailer, whether you succeed or not in making a success of the end-of-year period will largely depend on the quality of your e-fulfillment operations. If you want to make your picking process run as smoothly as possible, it’s a good idea to place certain products — promotional products in particular — closer to packing stations. In addition, you would do well to calculate in advance whether it is more cost efficient to ship products from the same order separately or to consolidate them in a single parcel. Such insights can make a big difference when all is said and done. Also make sure that the warehouse is set up optimally for the different channels you serve. A good understanding of how the different peaks can impact on warehouse operations is of great importance for optimizing systems and subsystems, such as packing machines, for all channels.
The automation of certain steps of the process, including automated box sealing, can go a long way to eliminating bottlenecks in the process. Having said that, it is also possible to speed up manual processes — by establishing an additional packing station, for example. It is important to be very aware of where the bottlenecks are, so that you can implement countermeasures in good time. Another way to make sure you’re prepared for peak times in the warehouse is to ensure that warehouse staff are trained to be multidisciplinary, especially in areas that demand particular training and experience. Temporary picking and packing staff will be quick to learn the ropes, but you can’t put them straight onto driving a forklift or reach truck. A system of flexible working hours is also handy for quickly scaling up warehouse capacity. And, finally: train your staff in problem solving ahead of time, so that they can help to safeguard the quality of processes during peak times. Landmark Global is acutely aware of the importance of quality logistics processes and guides its clients every day in eliminating bottlenecks and increasing efficiency.
In short, e-tailers need to have a solid strategy ready in advance of the end-of-year period, with all its potential and challenges, if they want to guarantee success. Flexibility and scalability will play a crucial role in this. Operations that succeed in boosting their speed without compromising on quality will find themselves ahead of the competition. And above all: know your customers. Understand what is important to them and aim to exceed their expectations, even during the end-of-year period.
The most important e-commerce peaks in 2015 globally:
10/11: Deepavali (Singapore)
11–15/11: Diwali (India)
11/11: Singles’ Day (China)
17/11: Click Frenzy (Australia)
27/11: Black Friday (USA)
30/11: Cyber Monday (USA)
1–31/12: Winter Bonus (Japan)
6–14/12: Hanukkah (Jewish holiday, worldwide)
12/12: Double 12 (China)
25/12: Christmas (worldwide)
26/12: Boxing Day (Australia, Canada, Germany, Hong Kong, New Zealand, Sweden, UK)