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Holiday Preparation Part 4: Planning a Smart Fulfillment Strategy

Trying to determine what it will take to succeed at shipping and returns this holiday season? In many ways, it’ll all come down to your data.

That was a key takeaway from this week’s holiday prep webinar with FedEx.

After visiting the ghosts of holidays past, unwrapping digital marketing strategies and preparing for sales with Google Shopping Actions, it was time to hear from the fulfillment experts.

For the latest installment of our holiday strategy series, we turned to supply chain expert Dan Coll for insights sellers can use to deliver on consumer expectations throughout the season. Here’s what he suggests:

A Strong Fulfillment Strategy in 2018 Will …

1. Start with data

We all know that fast, efficient and reliable deliveries are essential to a positive customer experience. At no time is this truer than during the critical Q4 peak season.

With nearly a quarter of all annual e-commerce sales taking place in November and December, this is a time when careful planning and execution in all areas of your supply chain are crucial.

That’s where data comes in.

Whether this is your second or 20th peak season, start by reviewing your historical data to establish a baseline and and predict upcoming demand. Use reports from your current inventory platform, if possible, and get as micro as your data will allow.

If it’s your first time selling during the holiday rush, there’s still plenty of external data you can use. Search for stats online, discuss trends with leaders in your space and ask partners for estimates.

Either way, take some time to answer mission-critical questions for the coming months, such as:

  • Are certain SKUs likely to be popular enough that you’ll need to adjust inventory?
  • Will seasonal spikes in orders affect certain regions more than others?
  • Is a multi-facility approach needed to get deliveries on doorsteps faster? What impact might it have on speed and cost of shipping?

Leaning on historical data is a first critical step for meeting customer expectations while keeping costs down.

2. Continue across channels

If you’ve been thinking about expanding to a new marketplace, consider launching soon — while there’s still time to prepare for the holiday rush.

Embracing a multichannel strategy will not only get your products in front of more consumers, but also allow you to use marketplace integrations that make it easier to track orders and plan for spikes.

Even when inventory is limited, it often makes sense to reduce volume on less profitable channels so you can test the waters on new ones. This is especially true during the holidays, when shoppers are more inclined to visit niche platforms such as Wish and Overstock.

Just be sure you (or your 3PL) are prepared to meet each channel’s service-level agreement, and that you have logistics in place to manage real-time demands on each channel.

3. Optimize transportation and transit times

Government regulations, extreme weather, an aging workforce … these and other major factors may be out of your control. But that doesn’t mean speeding up deliveries is out of the question.

Again, forecasting and advanced preparation are essential. For inbound shipments, planning is key — especially if you want to avoid same-day requests. One way to do this is by moving inventory into stock well in advance of the holiday rush.

By focusing on marketing and sales strategies that encourage early holiday orders (think October or earlier), you can take advantage of periods when transportation is more readily available. And because early holiday sales tend to be less time restrictive, it’s far more affordable to offer free shipping.

Then, when the sales surge strikes, be ready to leverage carrier relationships. Start looking now for a provider with strong connections that can be used to negotiate rates during a competitive peak season. This one preparation alone can free up wide swaths of time for your business to focus on generating more sales, instead of worrying over whether transportation will be arranged in time.

4. Prioritize returns

While the challenge isn’t new, it’s getting more pronounced every year. With the steady growth of e-commerce in recent years, reverse logistics is just as important as order deliveries.

The amount of returned merchandise has grown about 16% over the last two years, with the return rate for e-commerce sales cited at two to three times that of traditional brick-and-mortar retail.

So in addition to fulfilling orders, you’ll need to be ready to accept returns, too.

Should you choose to insource returns, rather than outsourcing to a 3PL, be sure to heed the following advice from FedEx:

  • Prepare, train and staff your customer service team appropriately
  • Automate returns wherever possible
  • If all else fails, be prepared to process returns as quickly as possible so you can resell them at full value during peak sales periods

Bottom line: How you handle fulfillment can make or break the season for your brand. Now’s the time to start planning, partnering and preparing. For more ideas beyond these highlights, watch the full on-demand recording.

Up next: Don’t miss the exciting conclusion to our five-part holiday strategy series next week, when CEO David Spitz and Co-Founder Scot Wingo will provide the full blueprint for a successful 2018 season. View the full series here.

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