Complete the Sale: Set up Fulfillment & Shipping for Holiday Season 2020
This blog is part of a series devoted to providing businesses with an action plan for Holiday Season 2020.
The revenue from your eCommerce sales aren't truly in the bank until the order is successfully fulfilled, shipped, and the happy customer decides to keep everything.
The better you're able to complete this final step, the greater your chance of keeping customers satisfied and generating even more sales to increase their lifetime value. This fact might have never been more critical in the entire history of eCommerce than it is during the 2020 holiday season.
The COVID-19 pandemic has reshaped our global economy. People are spending more online, even as budgets tighten. Your competition is growing, and major retailers are doubling down on their digital initiatives. We're all barreling down the road at breakneck speed, hurtling toward the year-end sales season. If your fulfillment is ready to handle the coming demands, your brakes are out.
Now is the time to prepare and get that tune-up to ensure you can handle the turns and sharp curves without careening off the road. We've identified nine core aspects of fulfillment for the year-end to help your online store prepare and keep it on the road, even when things get icy.
Download Your Complete 2020 Holiday Sales Playbook
Here are 9 expert tips to get your fulfillment and shipping ready for the 2020 holiday season:
Get ready earlier than expected
Understand your inventory and its needs
Stock up on materials
Check in with partners
Run your promotions strategically
Review shipping options and alternatives
Proactively work to keep customers happy
Create an unboxing experience
Plan how you’ll handle the influx of returns
01. Get ready earlier than you expect
The holiday shopping season will likely start weeks earlier than expected in 2020, meaning you've got to start getting ready right now. Amazon Prime Day, which amounted to roughly $7.16 billion in sales last year, is typically held in July to boost summer sales. However, the eCommerce giant has confirmed that it will push Prime Day to Q4 this year, and most speculation is that it'll happen around October 5th.
No one knows precisely what the implications of this will be on holiday sales, but it seems like it’ll move purchases, demand, and even year-end returns earlier.
COVID-19 has already led to many shipping and fulfillment delays as well as lost packages. With the spike in sales that’s expected to occur as a result of Prime Day and holiday shopping, this problem may become even worse. If your customers experienced lengthy delays in their shopping recently, they may be more inclined to start buying now so that everything will arrive on time. Shopping early means fewer chances that a Christmas present arrives in mid-January.
All of the advice you typically follow and everything we're discussing now should happen weeks sooner than it did last year. Adjust your game plan to have enough time to adapt in order to meet customer expectations and demands—because they're coming.
02. Understand your inventory and its needs
Understanding that your orders may come sooner than expected, you’ll need to prep your inventory and the physical space it needs a little ahead of time, too.
Start by looking at how the COVID-19 pandemic has impacted your inventory and warehouse space right now. Have certain product sales dropped off the map? Did you clear shelves to make room for a surprise boon in one product category? Are past best-sellers – those located closest to your packing station – still worthy of that place of honor?
As we've all learned, because of the quickly changing market, last year's data may not be as relevant as last month's. So, review your physical space and layout, and don't forget to look for ways to increase room or adapt to the latest trends. If you want to play it safe, take the overall sales gain you experienced during the 2019 holiday season and plan for that, but allocate space and growth based on what's currently selling.
There are other common problems to watch out for when it comes to inventory and physical space. Review the amount of product you plan to order and stock, plus when you think these shipments will arrive. If you're stocking up early, get a clear picture of that volume. Ask questions about these activities:
How much space would you need to unpack the average freight order from a truck?
Do you have the room or will you need to move things around?
Is there enough shelf space to store things, or will you need additional staging areas?
Would your pickers fulfill orders faster if you changed where goods are located?
Do your aisles have enough physical space to accommodate people and any equipment needed to fulfill orders?
Do you have enough equipment if orders increase?
Get as much of a "big picture" view of things as you can. Each of those questions is a domino waiting to fall. For instance, needing more equipment means buying it. You also need to store it and may need to charge it, too. Some employees may need training on how to use it. And the list goes on.
Holiday fulfillment is all about planning, and you want to keep asking the next question to ensure you limit the number of risks or surprises you face.
03. Stock up on materials
While our article about holiday supply chain management covers reasons for finding multiple suppliers and partners to get products to your warehouse or distribution facility, the same lessons apply to everything you require to get an order packed and out the door.
With eCommerce sales expected to maintain a high volume throughout the year-end shopping season, you'll likely be using more packaging materials, boxes, filler, tape, and other elements than in a standard season. If you start stocking up now — not panic buying, but slightly increasing your amounts on refill or resupply orders — you can avoid running out of these necessary items.
Waiting until your crunch time could make it more challenging to get these materials. Not only will you be competing against other eCommerce stores ordering supplies, you may have fewer brick-and-mortar retail locations available for these types of materials. Or you could be forced to go to locations that charge a premium for packaging supplies.
You don't want to go overboard like most of us did on toilet paper and hand sanitizer during the spring, but it's a smart idea to stock up slowly and build a more extensive layer of protection.
04. Check in with partners
Getting ready sooner than normal, from products and space to packaging, puts a strain on your company and the others in your supply chain. Dramatic increases in orders can cause backlogs for them, too. Be the best partner you can be by reaching out right now.
Start by asking your manufacturing partners, goods suppliers, third-party logistics providers (3PLs), and other partners if they have any specific requirements for the year-end season. See if they've changed or set new requirements, such as increasing minimum order amounts or values.
Here are some things to discuss:
Do you need to increase or change order sizes?
Are they asking for longer lead times?
Are they giving preferences to bulk orders?
Do they expect orders to take longer to fill?
What materials do they expect to run out of?
What can you do to help?
Being proactive and trying to meet their needs makes you a better partner and customer. And if they're only able to fill some of their orders, it also makes them a little more likely to choose yours. Work with people to meet their needs, and you may get some leeway if you have an emergency situation as well.
Get a clear set of expectations from your most important partners and share these with your teammates. Increased requirements can have ripple effects throughout your supply chain. For example, manufacturers requiring larger bulk orders means you'll need more space from a warehouse partner to house those goods. The best way to plan is to get all of this information together and have every stakeholder in your company to review it.
05. Run your promotions strategically
Managing your holiday promotions will help you space out your fulfillment demand. By doing this you can avoid a season's worth of orders to fulfill in one week and then almost none the next.
Try many different offers and deals throughout the holiday season, starting early for those Prime Day shoppers. Create your full holiday eCommerce marketing strategy plan now and offer the lower initial discounts soon. Reach your pinnacle deals around Cyber Monday and then create a second peak around December 13th to catch that last bit of sales where standard shipping will still get packages delivered on time.
It's a smart strategy to help keep the entire operation running smoothly while also building up customer insights ahead of Cyber Monday.
Consider the spending trends of your customers. While shoppers increased their online spending in early 2020, the caveat in this data is that total retail spending is down.
Your customers are likely buying more things online instead of in a store, but they're shopping less overall. So, although you've got a better chance at getting in front of them with a professional eCommerce website and SEO-optimized product pages, you'll also need to offer the best deals to get people to actually add things to their cart. In some cases, this will mean increasing your options at lower price points.
Start by looking at your 2020 sales so far and seeing if product pricing has shifted sales numbers or if your average order value is down. If it's lower, adjust standard pricing as well as your deals and discounts to meet the budget of your core customer.
It's a great time to get creative, too. One of your better options could be to try out a new subscription model. Offer the first month or two at a large discount to make it possible for people to gift subscriptions to friends and family. Think of the razor and blades sales model as a guide to getting your digital foot in the door. This is also another great strategy to help stagger your fulfillment requirements over time.
06. Review shipping options and alternatives
Companies of all kinds experienced shipping and delivery issues during early 2020. While things have largely returned to normal, there have been increased costs and surprises at different points in the supply chain, especially with getting goods from distant manufacturers.
While your business can't mitigate some of the inbound issues with shipping, you can address outbound shipments to customers in a variety of ways. You'll want to start sourcing eCommerce shipping and fulfillment alternatives to limit delays as much as possible.
Start by keeping your eye on complaints or concerns with standard carriers. If UPS, FedEx, or USPS have issues in your area or problems delivering to customers, consider using one of their competitors. For local deliveries, non-traditional carriers are growing and maybe an immediate option for customers near your warehouse for customers. These include Lyft, Uber, and smaller companies such as Roadie.
Some small companies that have become Amazon's local delivery partners also offer parcel delivery service in small areas. If you're in a large market or near a port, you may also have access to local, same-day freight shipping services that can help you move goods to a warehouse or distribution center more quickly.
For eCommerce businesses with access to physical store locations, add curbside pickup option to your site. If you don't have a physical storefront, try getting creative. Your warehouse location may be able to support pickups if you rope off a certain location of your parking lot or an entrance away from your docks. Or there may be an organization in your community that you can partner with to use their location.
If you're not already using software to manage your orders, this could be the perfect time to adopt it. Services such as Shippo or ShipStation make it easy to connect your order management systems and look for carriers based on a variety of needs—including speed, price, delivery times, and more. Such platforms are a good idea in general because you can optimize and automate carrier selection, pickup requests, returns processing, and more. Some will even give you portals for customers to track their orders, start returns, or get updates. That's a smart way to improve your customer service, which is just as important during the year as it is during the holiday season sales.
07. Proactively work to keep customers happy
Holiday season eCommerce sales success often depends on competing for customers based on deals and price, with customer service and reliability coming in a close second. You'll be battling against many smaller players as well as big marketplaces, like Amazon. Some of your competitors are going to offer free, fast shipping — like Prime — while smaller shops may try to be more flexible with pricing and discounts to grab customers.
You're likely to find yourself somewhere in the middle, where you could focus either on cutting shipping costs or increasing other pricing cuts. The question to ask, and potentially A/B test, is which method makes a more significant difference to your customer.
In light of COVID-19, most businesses need to carefully balance what customers want and what you can reasonably afford. Tighter months may mean you're less able to offer a loss leader or BOGO discount. At the same time, you'll want to review this year's shipping rates and successes against the issues you've had with carriers or suppliers.
What caused your most significant issue in 2020? What can you do to stop it from happening again during the peak sales season?
If you're looking more heavily at the logistics side of things, consider selecting a faster shipping option as your stand offer. This can help you ensure goods arrive on time while still allowing people to pay for expedited or 2-day shipping. A small improvement that comes with a guaranteed delivery date may be all you need to ensure the confidence of your customers.
Adjust your shipping policy, charges, and service goals to meet the season. Here are some shipping considerations to think about to help you adapt:
How much of a margin can you comfortably lose on an order for deals or discounted shipping to gain business but maintain revenue?
What's the minimum order value where you more than make up for added costs?
Can you slightly increase product prices now to be able to offer free shipping?
Do you have any loss leaders that can be used to entice a larger cart total?
Are there slow-selling items you can offer as a gift?
What have people asked for that you can reasonably deliver?
Plan how you can reach your sales or revenue targets while creating a plan to address the issues you faced as a result of COVID-19. You'll need to be able to address them if a new outbreak occurs or if a partner has a repeat problem. And if those problems arise, what can you offer customers to mitigate issues and minimize complaints or returns?
08. Create an unboxing experience
While businesses used to see the “unboxing experience” as a way set their store apart, it is increasingly becoming a fundamental aspect to branding.
Put extra care into your packaging to create a unique experience for whoever opens the box. This can both strengthen your business’ brand and give your customers an extra reason to smile during this complicated time.
In fact, a beautifully packaged product has been scientifically proven to cause joy: A 2013 study found that a box with attractive packaging activated regions in the recipients’ brains associated with reward, while unattractive ones led to negative emotions.
To take your unboxing up a notch, consider these tips:
Maximize your space. If you’re shipping in a box, make sure it’s full. Then fold or wrap each item individually. Packing peanuts or confetti are great ways to add color and fill up extra space.
Brand your packaging. Use boxes, tape and tissue paper with your store’s colors, logo and font. If your product is a gift, consider limiting your branding to the inside of the box so you don’t ruin the surprise.
Keep consistent holiday messaging. Add holiday imagery or winter themes to your packaging. Match it to the overall look and feel of your holiday promotions.
Write a personalized note. Place a letter in the box that thanks your customers for choosing you and wishes them happy holidays. Go above and beyond with a hand-written letter or by signing printed letters by hand.
Surprise them. If you have extra small inventory lying around that won’t add weight to your box and impact shipping fees, throw it in as an extra gift.
Use unconventional packaging. Wrap your items in reusable or sustainable materials. Not only is this good for the planet, customers will become ambassadors for your brand if they can reuse your packaging in the future. Plus, it’ll help make your business memorable.
A truly great unboxing experience can live on even past the moment of the unboxing itself. Unboxing videos have taken the internet by a storm, with some YouTubers dedicating their channel entirely to this content and receiving millions of views. In fact, a Google study found that around 20% of shoppers have reported watching unboxing videos online, while a whopping 62% watched unboxing clips while researching a product.
Give your customers an unboxing experience they’ll want to record. That way, they become partners in promoting your brand.
09. Plan how you'll handle the influx of returns
With more eCommerce shopping will come more eCommerce returns to your store. They're a fact of life, but you need a plan for the holiday spike. As much as 25% of all annual eCommerce returns happened between Thanksgiving 2019 and the end of January 2020—an estimated worth of more than $100 billion.
The pandemic created returns challenges for eCommerce companies, too. This resulted in new policies to keep shoppers happy and maximize customer lifetime value. Some core trends included extending return times and options. Retailers with online and physical locations had to adjust or stop taking returns at their brick-and-mortar stores.
Write a clear return policy
One eCommerce trend highlighted during the pandemic is that customers aren't as eager to buy from stores with confusing or highly restrictive return policies. Remember, 67% of online shoppers check a store's return policy before they make that purchase decision, so you want something straightforward and easy to find.
To prepare for this influx, start by building a comprehensive and straightforward return and refund policy. Include what's covered by your business, the returns timeframe, costs, and any logistic information customers need to know. The clearer you are, the better for you too. If customers know to use a specific form first, that'll cut down on email, chat, and other customer service engagements to get a return started.
Include a link to the return and refund policy on product pages, the site footer, as well as in any locations that discuss your shipping process or additional fees. It can help boost your credibility with customers and may generate more sales.
Prep your warehouse
On the warehouse side of things, talk with your fulfillment team about your return policies. Retrain them on what to look for and how to judge if a returned product can be accepted. Have them test processes now to get a feel for it.
When you get past the big sales days, have a team ready to clear a space in your warehouse and stage it for processing returns. Generally, there's about a week lead-time for returns to start coming in, but getting the space together earlier can help you prep in case things happen faster than expected. If possible, keep this space set aside throughout January.
In your returns processing area, get shelves and other materials to store goods at each stage. Separate these so it’s easy to keep track of which products:
Have been taken off a truck
Need to be entered into the system
Are waiting to be checked and verified – the product status and whether returns policies (like a 14-day window) have been followed
Have had associated order data updated to process return payments
Are ready to be put back on shelves
Should be counted and then discarded as defective
The clearer your policy and practices in your store and warehouse, the smoother the entire operation runs. You don't want to upset customers or create an unnecessary bottleneck that extends returns or replacement processing. Doing dry runs now will help you understand how you might need to adjust processes to avoid issues and delays.
Fulfillment is a customer service strategy
The end of 2020 is rapidly approaching, and there's a lot of work to do to get ready. In all that hustle and bustle, you're going to wear a lot of hats and face many challenges around your workforce, products, shipping, and millions of small other things.
In all of that, don't lose sight of your customer service.
One of the best things an eCommerce company can realize and turn into a mantra is that every aspect of your business is a part of the customer service you offer. Clean sites and easy-to-use carts improve service ahead of the sale. Reliable shipping and simple returns extend that service beyond the first sale. Access to information and proactive work to keep customers happy are part of your service for every future purchase, too.
Fulfillment plays a role in all of those experiences. Some eCommerce businesses will put this on the back burner because a 3PL, carrier, and other partner handle the act of getting goods to customers. However, those shoppers are going to judge your business by how well these parts perform. You get the credit for what's done right and the blame for what breaks.
Work hard to oil all the parts of your supply chain machine. Get it ready and test it. The first shopping days are just around the corner.
Create a dynamic strategy for your business to succeed this holiday season:
Don’t have your online store up and running yet? Create your eCommerce site and start selling today.
Director of Marketing for Red Stag Fulfillment
Jake is the Director of Marketing for Red Stag Fulfillment, an eCommerce fulfillment warehouse. He has years of experience in eCommerce and business development. In his free time, Jake enjoys reading about business and sharing his own experience with others.
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