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Are E-commerce Supply Chains Ready for An Unprecedented Holiday Season?

Visible President, Casey Adams, talks about what to expect for e-commerce shipping during the holidays and how to prepare to best serve and impress (article also featured in GritDaily).

In the wake of COVID-19, there are significant changes in consumer habits and mail carrier performance. Here’s how retailers can prepare for an unpredictable peak season.

2020 is the year of new norms, and that includes holiday shopping behavior. Consumer habits, mail carrier performance and supply chains continuously evolve as the pandemic continues.

In a world-wide study released last week by Salesforce, 58% of consumers and 80% of business buyers expect to do more online shopping after the pandemic than before.

 

Percentage of Shipments for 7 Days in Transit

supply chain holiday season

 

Percentage of Packages Delivered by Transit Days and Month

percentage of packages delivered

 

What to expect

Parcel carriers have managed holiday-like spikes in shipping volume since the pandemic hit. Research indicates holiday volume will mirror or top that.

Internet advertiser, Criteo, reported that online sales were 30% higher in the Americas and 17% higher worldwide from June 15 to 28 compared to February 2 to 14, pre-pandemic. Increased e-commerce sales during the outbreak indicate that consumers are online shopping more than ever and will presumably continue throughout the holidays. According to the aforementioned Salesforce survey, 88% of respondents reported that they plan to continue purchasing gifts online and sending them to recipients.

This surge could lead to lags in shipping times and increased costs for retailers as carriers place increase surcharges and limit package pick-ups.

Retailers have started their Black Friday and holiday promotions early to combat the volume. What was a 30-day promotional period previously is now around 75 days.

 

How retailers can best serve customers

Communication is key. Perhaps most importantly, retailers should communicate early and often the possibility of shipping delays, so there is transparency when gifts will arrive.

Create a multi-carrier strategy. Diverse options help mitigate risk. Carrier diversity is a workaround for capped volume and capacity constraints. Additionally, splitting volume between carriers can help avoid the surcharges that apply to shippers who send a certain number of parcels per week. Consider enlisting help from a logistics provider with an extensive network of reliable partners to support this strategy.

Utilize multiple fulfillment centers. Strategically located fulfillment centers benefit both the retailer and the customer. When inventory is stored at more than one location, the product can be shipped from the location closest to the customer and reach them faster without incurring expedited delivery fees, improving transit time. Having distribution centers across the country serve as emergency preparedness if a facility shuts down for several days in the event of a crisis.

Optimize your packaging. When it comes to packaging, think outside the box. Pun intended. Packaging doesn’t just contain and protect a product; it reinforces your brand. Consider how packaging contributes to the customer’s overall experience. Evaluate whether you are using the right materials—and the right amount of materials—for maximum efficiency. Reducing the package’s size/weight and eliminating excess materials can create savings and allow more orders to get loaded for delivery.

Take advantage of technology. Choose a logistics partner that can optimize shipping processes using technology. Parcel tracking and scan and pack verification systems add an extra layer of accuracy and quality control to the fulfillment process. They ensure the right products get delivered to the right place as timely as possible.

If possible, online-only retailers should consider establishing pop-ups in customer-dense cities to allow curbside pick-up through web and app portals. 88% of customers expect companies of all kinds to accelerate digital initiatives due to the pandemic, and 83% expect retailers to provide flexible shipping and fulfillment options such as buy-online-pick-up-at-store, according to Salesforce.

 

Silver linings and opportunity

Although recent events have created supply chain disruptions globally, it has also created an opportunity. Companies are re-evaluating their supply chains, finding ways to increase resilience and efficiency and build customer loyalty.