The holiday season should be the most wonderful – and busiest – time of the year for a retail supply chain. But, with the pandemic altering shopping behavior, predicting what Q4 2020 has in store for retailers is anyone’s guess.
Consequently, retailers must deploy creative tactics to remain competitive, build customer loyalty and get a piece of the holiday pie. We’re sharing some strategies to help prepare your retail business for an unpredictable season.
4 Ways to Prepare Your Retail Supply Chain for the Holidays
1. Drive Your Customers to Buy Early
This will not be the season for last-minute shoppers. A combination of physical restrictions in stores and capacity issues for carriers (due to historic levels of online orders) will extend the time shoppers can get in and out of stores and extend delivery times on shipments. Retailers should invite customers to shop early with incentives and promotions.
2. Optimize All Inventory
According to IHL Group, out-of-stocks account for $634 billion in lost sales worldwide each year due to poor inventory management. Fortunately for retailers, there’s distributed order management (DOM) to help remedy this problem. Once considered a nice-to-have due to its ability to provide click and collect functionality (among many other important things), a DOM system is now a must-have for every omnichannel retailer. In addition to order orchestration, consolidation and routing, a DOM also pools inventory and provides a snapshot of stock across all fulfillment channels. That means you and your customers see what stock is available, regardless of where it is sitting, helping to secure that online sale.
3. Get a Handle on Shipping Costs
Demand for fast delivery exploded during the COVID-19 pandemic and is likely to increase during the holidays. But with traditional carriers adding surcharges on parcel deliveries, offering fast delivery at little or no cost this holiday season can quickly wipe the profit off ship-to-home orders. To reduce last-mile delivery costs and compete with same-day shipping, explore these strategies for your retail supply chain:
- Crowdsourced Fulfillment: Leverage crowdsourced delivery networks to connect with local couriers and reduce your last-mile delivery costs.
- Diversify Your Carrier Mix: Include regional carriers in your carrier mix to handle increased volume and lessen your overall transportation costs. Rates for regional parcel carriers are often lower than national carriers and they have fewer surcharges and freight accessorial services charges.
4. Let Customers Come to You (and maybe they’ll even spend more)
With consumers putting a premium on convenient, free and fast shipping options, your physical store is an asset that you can leverage to fulfill orders quickly and compete against fast brands such as Amazon this peak season.
Two alternative delivery options you should consider offering from your store space are Buy Online Pickup In-Store (BOPIS) and Buy Online Pickup at Curb (BOPAC). These two options enable you to offer fast, free delivery and, depending if your store is open to foot traffic, get your customers into your store to maybe make additional purchases. According to a Salesforce report, e-commerce sites that provide BOPIS or BOPAC will grow online holiday sales by an average of 90% year over year. Once again, the way to implement click and collect is through distributed order management.
Prepare Your Retail Supply Chain for the Holidays and Beyond
Undoubtedly, the global pandemic has reset the game board and holiday shopping will look different this year. To remain competitive, flexibility and agility are key as is an investment in technology to unlock omnichannel functionality. Even beyond this holiday season, these investments will pay dividends and retail continues its rapid shift to a true omnichannel model.