Why Retailers Put Their Sleighbells on in May

The sun is shining and the weather is warm, yet the world’s top retailers are humming holiday tunes and preparing for the busy season ahead. Retailers often prep for holiday delivery logistics months in advance, but 2014 saw them beginning preparations earlier than ever—in May.

And who could blame them? We all remember last year’s scathing headlines when millions of packages failed to reach shoppers in time for Christmas morning. December 2013 was a hard-knocks lesson — even a small percentage of missed delivery windows can severely damage brand reputation and strain customer loyalty.

As online and mobile shopping become increasingly common, consumer expectations for the perfect order are on the rise. Regardless of how easy the online order process, the part of the transaction the customer remembers is the delivery. Was it on time? In perfect condition?

Keeping All Your Elves in a Row

A well-run distribution center (DC) is the first line of defense in ensuring order accuracy. The rise of two-day and overnight shipping requests, compounded by spikes in holiday shipping volumes, make DC flexibility a top competitive differentiator for all retailers.

As a result, companies such as Amazon and Walmart are using localized solutions, such as pop-up distribution centers, to improve flexibility and help meet increased volumes. Many companies are testing locker models through which customers can pick up online purchases from secure, convenient locations near their work or home.

The downside is that every additional DC or pickup location adds another touch. And localized DC models are just the beginning of increased holiday complexity. Additional challenges include:

  • Seasonal staffing. Hundreds of thousands of seasonal workers staff warehouses, distribution centers, and company fleets each year. While essential, coordinating and keeping tabs on the millions of orders that cross those fingertips is no small feat.
  • Manual order tracking and inventory systems. Paper-based or spreadsheet-based order planning and tracking systems are still standard tools for many organizations. Manually tracking orders, capturing signatures, and reconciling returns on a paper manifest is wasteful, inaccurate, and archaic in today’s tech-savvy workforce.
  • Third-party providers and capacity constraints. Today’s trucking industry faces a shortage of nearly 30,000 drivers, contributing to a rise in industry-wide reliance on third-party logistics providers. Even beyond the holidays, the concept of a private company fleet that handles 100 percent of its own orders is just about extinct.

Planning for the Holidays

No matter what this holiday season brings, every logistics operation should abide by three rules of thumb:

  1. Be transparent and communicative with customers throughout the delivery process.
  2. Proactively establish two-way communication with internal and third-party personnel.
  3. Aim to achieve a perfect order 99.9 percent of the time for a customer experience that delights.

By planning ahead and taking extra care to oversee the entire logistics process when operations are at their busiest, companies can celebrate this holiday season with the gift of customer retention and brand loyalty.

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