It is no secret that 2021 has not gone exactly as planned. As vaccinations were being introduced, many Americans assumed that life would return to normal. Although some retailers allowed customers to enter their stores following State and CDC guidelines early on, almost all had anticipated regular foot traffic by now. However, the growth of delta variant cases suggests that the consumer habits developed in 2020 will endure for some time. Once again, consumers are primarily shopping online for retail, essentials, and service-related items.
Winter Is Coming
In 2020, the term "Shippagedon" was coined in reference to understocked shelves that resulted from the inability to obtain imported goods. Consumers were unable to obtain basic supplies, including toilet paper and hand sanitizer, for months. A year later, we are experiencing similar issues, and there are new concerns to address as retailers prepare for round two of "Shippagedon."
Looking back at projections from last year, there were actually fewer sales for Q4 2020 compared to Q3. According to Statista, e-commerce accounted for $201,382 million in Q3 2020 and only $199,665 million in Q4 2020. While this might not seem like a huge difference, selling less in Q4 than in Q3 is a very rare occurrence. This year, the sales numbers for Q3 are not yet publicly available; therefore, we are forced to speculate. In the second quarter of 2021, e-commerce accounted for $222,484 million in sales without any sign of slowing down. Online shopping is becoming increasingly popular as consumers grow accustomed to it.
How To Prepare
The fourth quarter is undoubtedly the most challenging time of year for retailers and shippers. Regardless of a company's length of operation, industry changes can leave companies stressed as they attempt to adjust for peak season sales. There are several factors affecting all businesses, including a massive increase in freight and cargo shipping, delivery and warehouse labor shortages, and last-mile delivery issues. To address these concerns, several retailers and carriers have already increased their commercial pricing. In contrast, others have simply reduced their inventory levels in order not to overpromise to their customers. Companies need to decide early on where they will maintain inventory, how much inventory they will keep, and what systems they will use to fulfill orders in order to avoid inventory shortages and shipping delays. Here are four more ways to navigate Q4:
Know Your Numbers
Are you prepared to guarantee that your items will be on hand by the time your sale occurs? Nothing is more frustrating for a customer than receiving an email telling them that their order has been canceled due to insufficient stock, especially when consumers are on a time crunch to get a gift by a certain holiday. As a result, customer loyalty and trust may be affected. It is imperative that you have a good understanding of your inventory quantities and the stats on timing it will take to package and process orders, as well as numbers associated with how long it will take for your carriers to deliver. Having a working knowledge of your numbers can assist you in determining what your company is able to accomplish during the fourth quarter.
Communicate With Customers
You cannot underestimate the power of sharing information! Defining expectations will let your customers know that you, as a business, are committed to delivering on your promises. Your regular order delivery notifications are not sufficient to keep customers informed during this busy period. Going above and beyond to keep customers informed will ensure they will return to you for all future holiday purchases.
Be Realistic About Shipping Costs and Times
As a result of the labor shortage across the country, shipping delays are likely to occur. Several carriers have already announced the addition of a peak surcharge from October 1st until mid-January in order to combat this issue. In addition to delays, it is imperative to understand the costs associated with different shipping options, including free shipping, which consumers often expect. During the holiday season, your company will need to perform a cost-benefit analysis to determine if free shipping or expedited shipping is worthwhile.
Invest in an OMS
During Q4, the implementation of OMS (Order Management System) software is of particular importance. The right OMS is key to facilitating inventory management, order processing, and delivery management. They will be able to provide you with substantial savings in time and costs, even during the busiest times of the year. Leveraging technology to help get customers the correct package on time, is important to keep customers coming back for more.
Despite the uncertainties that surround this holiday season, we can be sure that it will not be an easy time. Considering the state of the world, it is reasonable to assume that things may be more difficult this year. Don't get caught up in problems that you can easily control. Take the time to prepare and navigate Q4 like a pro.
Happy Holiday Shipping Season!