The rapid influx of business during the holiday peak season can place a microscope on an emerging brand’s operations. Recognizing that so much can be learned throughout the busiest and most stressful time of the year, we at Dotcom Distribution decided to conduct a survey to see how eCommerce companies fared during the 2017 holiday season, especially in the key fulfillment areas. The pain points were many but an experienced partner can provide relief.
In our survey, we asked 125 eCommerce professionals to evaluate their fulfillment performance during this past peak, as well as to identify their most difficult struggles. Because this was projected to be the biggest holiday shopping season on record –and it was– it proved to be the perfect time to do the research.
While finding that 20% of brands were not satisfied with their fulfillment performance was noteworthy, what was more important was why. In addition to the specific issues faced by brands of different sizes and industries, we found that most problems stem from project management. Service level agreements (SLAs) are common components of logistics and fulfillment partnerships, but what if they aren’t met? While preparing your brand to minimize potential errors is always vital, the true key to handling peak seasons is identifying what can go wrong and proactively creating strategies to prevent them.
While rising order volumes make for impressive sales numbers, they likely come with more questions from shoppers. Thirty percent (30%) of participating eCommerce brands received more customer service calls this past holiday peak. You should think of these inquiries and requests as opportunities to improve and maintain relationships with your customers. One way to prepare for this dialogue is to utilize a quality technology stack that creates full visibility into every area of the business. This will allow you to answer customer queries quickly.
3PL fulfillment providers don’t always facilitate customer service, but they can make it easier and more accurate for you. At Dotcom Distribution, we have a web reporting portal that allows clients to identify any fulfillment issues in real time so they can resolve them immediately. The holiday peak is when these technologies are most valuable so you should look back at this past year’s season to see how they performed. Properly monitoring your technologies can do more than help achieve the SLA of quality customer service. It can ensure that your customers are not among the 82% of consumers who have left a company after a poor customer service experience.
A main SLA goal is to satisfy customers through accurate order processing and fulfillment. Unfortunately, that isn’t always the case, as indicated by our survey results. Less than a third of respondents achieved 100% order accuracy. Falling below the industry-standard 99.99% creates poor experiences and angry customers. Their reactions may be to spread negative words, especially on social media, which can lower sales. The right SLAs guarantee some level of accuracy, but project management keeps everything on track to reach the predetermined goals.
A proactive approach involves an order management system (OMS), which allows you to actively monitor inventory status across every channel in real-time. Though this software allows you to minimize errors, it’s still smart to have workarounds planned for when they inevitably happen, because we all know that nothing is perfect.
The first step to a satisfactory resolution is to respond quickly to customer questions or complaints, thereby creating a transparent relationship. Uninformed customers are left to draw their own conclusions, which can lead to them painting a picture of a brand that isn’t trustworthy. Next is to implement an already-developed replacement process. There’s no way around the fact that fixing the problem comes at a price, but developing a strategy beforehand can help create the most cost-effective solutions.
Though fulfillment partners and 3PLs often don’t actually ship products, they are responsible for establishing the ideal methods and selecting trusted carriers. Our survey found that this link in the logistics chain left a lot to be desired. Only about 23% of respondents noticed 100% of their orders shipped completely. On top of that, brands listed delays as one of their biggest issues of this past holiday season. The result of this problem for e-tailers is frustrated customers, increased costs, and lower profits. This trifecta of turmoil can be prevented with proper project management.
Prioritizing time management in day-to-day warehouse operations can optimize fulfillment, as well. The entire team must operate in the most efficient way possible throughout the year. If everyone is on board with this goal, order processing times can be significantly reduced.
You should also be aware of all available carrier options, as you may need to utilize different shipping methods to maintain the SLA. By knowing how long each carrier and medium take to arrive at destinations and the associated costs, you can swiftly react with the best decisions so items are delivered to the right address at the right time without breaking the bank.
Inventory management is another SLA that plays a role in fulfillment speed. By maintaining real-time inventory visibility, you can minimize the likelihood of delays and lost sales due to out-of-stock items. It’s equally important, however, to keep up with varying inventory levels and order volumes. You’ll likely need more items during peaks, so it’s necessary to have space reserved specifically for rising SKUs. Additionally, you should have plans to handle the increasing workload, adjusting daily goals to meet the appropriate levels.
Making the most out of the holiday peak involves anticipating the fires before they start, and having plans ready to go if and when issues arise. It’s never too early to start planning, so you may want to view our peak planning infographic to help construct your plan.