The countdown to a successful Christmas season starts this summer

By Andrew Scargill, Logistics Manager, EMEA at Digital River

 

Planning for the winter holiday season during the summer months might feel like a strange disconnect, but as any retailer knows, planning for the gift buying season starts long before advent calendars hit the shelves. And, having emerged from COVID-19, retailers now face new challenges; from supply chain issues to low consumer confidence. However, with the right strategy and planning, they can cross logistics nightmares off the list of holiday stresses.

Since early 2020, many companies have struggled to keep products in stock and fulfil orders in a timely manner. While it appears that such disruptions may again take a starring role in 2022’s holiday shopping season, it is possible to mitigate the negative impact and ensure products are available when and where shoppers want them.

Now is the time for ecommerce leaders to revise their logistics strategy and prioritise positive customer experiences. Here we break down the five considerations you need to address as we prepare for the ever-closer Christmas season.

Get a grip on carrier costs

Holiday surcharges initially imposed by carriers in 2020 will likely continue throughout 2022. Last year, parcel shipping prices jumped nearly 6%, with experts predicting another 5% increase in 2022. For cross-border and international shipping, the increase is estimated to be closer to 8-12%.

Given the rise of inflation and the COVID-19 pandemic, carrier costs will likely continue to skyrocket for the time being. While there isn’t a quick fix for the jump in cost, brands should look for opportunities to mitigate excessive spending where possible, including looking for opportunities for opening up new ship from locations or consolidating existing locations to cut costs. Longer term, brands should put out contracts for carrier pricing every 2-3 years to ensure they are getting a good deal. Additionally, third-party audit firms will review contracts and continually audit carrier invoices, looking for savings. Finding ways to account for carrier increases without simply passing the cost onto the consumer will be critical for maintaining positive customer experiences and hitting sales targets.

Addressing driver shortages

Labour shortages continue to affect all sectors of the global economy, but especially logistics. Many carriers and other logistics companies are still struggling to meet service-level agreements (SLAs) and adjust to their customers’ changing business needs because of staffing-related issues.

If these situations are impacting logistics partners, ecommerce brands should consider a change in supply chain strategy. This might include changing partners, consolidating inventory locations or modifying trade patterns to maximise their ability to meet shopper expectations while minimising costs or other negative impacts. Successful brands will have a Plan A, Plan B and likely a Plan C as disruptions continue in 2022. Many logistics providers are investing heavily in automation as one way to deal with labour shortages moving forward. Brands should be looking for partners who are working on long-term solutions to this kind of disruption.

Keeping customers in the loop

In the run-up to the 2022 holiday season, ecommerce brands must focus on communicating clearly and transparently with their customers to build trust and set realistic expectations. Presenting all information related to stock shortages, shipping, port delays, delivery, and any additional fees upfront can help reduce cart abandonment and improve the overall customer experience. This may require modifying ecommerce sites to feature logistics information either on individual product pages or in the checkout experience. Brands will need to continually monitor their supply chain and fulfilment capabilities to provide the latest, most accurate information to customers.

Following two chaotic holiday shopping seasons, customers have more realistic expectations, but brands should consider strategies to retain customers beyond the holiday season. Providing transparency during a critical shopping season will go a long way toward building customer loyalty.

Fulfil last-mile expectations

While it’s true that more consumers are making purchases online than ever before, brick-and-mortar locations can still hold significant value in delivering the types of experiences shoppers demand. Namely, the rise in popularity of buy online, pick up in store fulfilment is expected to continue in 2022. According to eMarketer, 18% of online orders from participating retailers on Cyber Monday in 2021 included curbside pickup. Brands that have physical locations may want to assess their in-store fulfilment process and look for ways to optimise the customer experience through upgrades to customer communications, proprietary apps, staff training or even physical signage.

Prep, plan and remain proactive

The International Monetary Fund (IMF) has warned that global supply chain problems will continue for years. Many brands started placing orders last spring to build up inventory in anticipation of the holiday rush. Now is the time to prioritise and optimise logistics strategies, employing the latest insights, tools and technologies to achieve this year’s sales goals and build resilient foundations for the future. While Christmas will be the first major test of 2022, how retailers prepare now will set the tone for years to come.

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