The holiday season sees 16% more first-time customers than any other shopping period. That’s an important opportunity for e-commerce providers because positive holiday shopping experiences can easily turn first-time customers into lifelong brand advocates.
But if customers are disappointed during the holidays, they won’t return. Worse yet, in today’s constantly connected culture, disgruntled holiday shoppers are likely to broadcast their disappointment to their social networks, generating negative mentions for the brand.
The bottom line? Logistics and delivery snafus simply aren’t acceptable during the holidays. To maximize revenue and increase loyalty, emerging online brands need to leverage data insights and the expertise of seasoned fulfillment partners.
Holiday Season Fulfillment and the Need for Peak Data Analysis
Data drives effective holiday fulfillment strategies. Using historical information and/or industry benchmarks, an experienced fulfillment partner can perform data analysis to forecast the timing of peak sales volumes as well as product-related information such as the colors and sizes that sell the most, in which combinations and on what channels.
Peak data analysis also enables fulfillment partners to align logistics requirements with promotions and seasonal campaigns. For example, by evaluating the impact of previous and planned promotional campaigns, a skilled fulfillment provider can determine how many SKUs a company should order in advance (which is especially important for products sourced overseas) or the days the brand will most likely need to augment its existing warehouse team.
Can e-commerce brands perform peak data analysis on their own? Sure. But in most cases, young, rapidly growing brands lack the experience and resources to perform peak analysis in-house. So it’s usually more efficient to outsource peak analysis to a fulfillment provider that understands the unique holiday-related challenges that e-commerce brands are up against.
Additional Benefits the Right Fulfillment Partner Can Provide During the Holidays
Peak data analysis is an important benefit e-commerce brands can achieve by partnering with a fulfillment provider. By developing a strategy based on measurable, historical outcomes, third-party fulfillment providers can properly prepare e-commerce brands to meet existing and first-time customers’ high expectations.
But peak data insights aren’t the only reasons why it makes sense for emerging e-commerce brands to partner with a fulfillment provider in the fourth quarter. The right fulfillment partner can deliver benefits in at least two other important areas:
Data-based forecasting helps brands make real-time operational adjustments to handle peak season demands. But there will inevitably be days when retailers receive far more orders than expected -- moments that have the potential to create unhappy customers who will never buy from the brand again.
The risk of unexpected order volumes is highest during the holiday season, when many shoppers order last-minute or high-priority items, and expect retailers to follow through on product guarantees and package delivery standards.
Blindly ramping up operational capacities for the holidays is inefficient. It’s more efficient to take advantage of a fulfillment partner’s existing infrastructure to handle peak season e-commerce demands. The best fulfillment providers have the warehouse capacity and experience to scale to demand, even on short notice. Likewise, fulfillment partners can scale back operations when the holidays are over, which frees up resources for marketing or other areas of the customer journey.
Packaging matters to online shoppers. Research shows that 61% of online shoppers believe that premium packaging makes a brand seem more upscale, and 40% of online shoppers say branded packaging makes them more likely to recommend a product to friends.
Emerging online retailers often struggle to execute branded packaging, especially during the holidays. But a fulfillment partner can seamlessly execute peak-season packaging needs to inspire increased sales and new customers during the holidays and throughout the year.
Keeping in mind that holiday fulfillment strategies aren’t a one-time event, fulfillment partners can also document problems and improve package systems from one year to the next, making it easier for brands to upgrade their packaging capabilities -- and the customer experience -- with every holiday season.
The holiday retail season tests a fulfillment partner’s ability to perform. As order volume grows and brands have the opportunity to increase long-term customer loyalty, they must be able to lean on their fulfillment partners for support, guidance and expertise. This is especially true for emerging e-commerce brands that lack multi-year experience managing seasonal demand.
The time to prepare for the holidays is now. By establishing or strengthening your relationship with your brand’s fulfillment partner, you can transform an otherwise frantic holiday fulfillment into an opportunity for exceptional customer experiences and repeat business that lasts long after your customers’ holiday decorations have been packed away in their boxes.
Maria Haggerty is CEO, Dotcom Distribution.
Maria Haggerty is CEO, Dotcom Distribution.