2020 saw a record-breaking e-commerce holiday season. But if the onset of the pandemic was a persistent growth barrier last year, this year it’s the repercussions being felt on e-commerce operations – supply chain disruptions, inventory delays by months, and astronomical shipping costs, to name a few.
Several factors combined are contributing to what experts call an unprecedented “perfect storm“: overcrowded ports, labor shortages, changes in carriers’ delivery standards, and severe weather-based upheavals. With all of this, online brand and retail leaders today find themselves compelled to make decisions about inventory without being able to rely on past consumer behavior patterns. Last year’s purchases can’t necessarily dictate much of this year, especially as economies worldwide open with a vengeance.
As we head into the holiday season, the biggest question for businesses is how can they navigate these disruptions. We’ve looked at 5 key areas of e-commerce businesses:
1. Inventory and supply chain management
During the past 18 months, 41% of a survey’s respondents have experienced supply chain challenges. Although it is rare for demand forecasts to be 100% accurate, you can still close the gap between estimates and actuals by taking a few steps:
- Analyze historic data and seasonal patterns
- Plan promotions in advance and anticipate spikes on holidays like New Year’s
- Monitor fast-moving items and slow-moving items to optimize stock levels
- Make early purchase decisions
- Consider longer production and delivery lead times
- Keep track of inventory receipt and shipping deadlines
By examining factors that might affect projections, such as advanced forecasting computations, you may gain a better understanding of how to flow inventory. Sales data, sales velocity, product age, stockouts, and product-specific trends are typically used to calculate these movements.
From an economic perspective shipping large products with low value will hardly profit in the current circumstances. For instance, smartphones are compact and expensive, making them an ideal good to ship or air freight amid skyrocketing transport costs. In contrast, low-end furnishings and large stuffed animals cannot be justified in the same way.
2. Order fulfillment and management process
Given the rising freight tariffs, manufacturing, and labor expenses, US retailers are expected to incur an additional USD 223 billion in their costs of goods this holiday season. Here’s where opting for a 3PL or third-party logistics provider makes sense.
Third-party fulfillment services can take care of the entire fulfillment process, allowing you to focus on strategy, marketing and other pressing operational areas. According to Shipbob, outsourcing your order fulfillment needs can:
- Bring 13% cost savings to your bottom line
- Increase your average order value by 97%
- Save your team countless hours of overwork per week
- Help fulfill international orders with less complexity
From an e-commerce operations perspective, this helps you avoid shopper disappointment in terms of shipment delays. Additionally, you can skip the ordeal of hiring additional labor for a few months and obtaining more warehouse space. Nonetheless, technology plays an instrumental role in optimizing operational integration. It also affords you the opportunity to win more customers with multiple purchase options, like buy online pick up in-store (BOPIS) and curbside pickup. In terms of order fulfillment from a shopper’s perspective, e-commerce players would do well by providing answers to some of these FAQs on their product detail page itself:
- What are my options?
- When do I need to order it to receive it by this date?
- How soon will it be delivered if I order now?
- Is curbside pickup an option?
- Could it be stored in a locker for me?
3. Website experience and payment solutions
The holidays are a great opportunity for retailers to wow first-time shoppers. As many scout for the best deals, buyers tend to veer less towards loyalty and are willing to act on their impulses. This means that a great website experience is key – from ensuring product content accuracy, reducing cart abandonments to driving more efficient returns. 69.5% of carts get abandoned – according to recent statistics. Those eager to work on these numbers will benefit from considering these checkout journey best practices:
- Set up a one-page checkout
- Ask for minimal personal information during the shopper’s journey
- Eliminate any unnecessary distractions for the customer (sitewide banners, header and footer)
67% of shoppers check the returns page before making a purchase. Consider including a post-order FAQs page as it can help customers find valuable information about the return process.
In terms of payment and the options that technology affords, brands and retailers would be well served to include authentication options like touch and face ID, where credentials are already loaded and ready to pay. PayPal, AmazonPay, and GooglePay are a few popular options preferred because of their seamlessness and time-saving features.
Online Shopping Cart Abandonment Rate Worldwide (2006-2020)
Source: Statista
4. Customer support
While customer support could be a big challenge during the holidays, brands and retailers can better benefit if they view this as an opportunity to create an impact. After all, more traffic translates to a bigger chance to work on growing your loyalty base. A Zendesk research found that ticket queries tend to increase in volume by as much as 42% during the holidays.
One way to manage the heavy load of customer queries is by employing a seamless Customer Relationship Management solution combined with insights from social media listening. This helps your e-commerce operations team be more attuned to persistent customer needs and seek timely ways to address them.
Some CRMs can also automate order confirmations and email marketing, further streamlining your online store’s operations. With supply chains in a disarray, one thing customers will want this year is real-time order lifecycle visibility to understand where their order is in the fulfillment process and when it will arrive.
Chatbots will be integral to this year’s customer support strategy as they will offer a welcome relief by tackling typical FAQs thus minimizing precious support time. According to a Facebook survey, over 50% of customers are more likely to buy from an online store that offers chat support.
5. Marketing
Free shipping, BOGOs, discount codes should be unmissable on your website. Ensure your customers have no trouble figuring out your holiday exclusive deals.
Optimizing your campaigns to highlight alternative products to those that are out of stock helps. Similarly, if you realize you hold a certain product that may have been swept off your rival’s shelves and could be in demand, lose no time to market it aggressively. From a sales perspective, you can use tactics like FOMO to lure back abandoned carts through effective email campaigns. Finally, leverage the power of relevant upselling and cross-selling. Savvy brands are already using AI to send their customers personalized product recommendations based on past purchase history and existing inventory levels.
For players eager to focus on their strengths, and make the most of this holiday season, technology and tact will both be critical. At Netscribes, our vast experience in partnering with leading online brands and retailers affords us the expertise to guide you in optimizing your holiday e-commerce operations to stay head and shoulders above the rest. To know how we can help you best serve your customers and make sustainable decisions to stay uniquely positioned for the rest of this peak season and beyond, contact us.
