The last few peak seasons have been challenging, to say the least, and this year was no different. There was a lot of uncertainty heading into the holidays. Businesses just really didn’t know what to expect.
As peak has played out, there have been mixed results. A Metapack study found that 58% of consumers expected to cut back on their spending for the 2022 holidays, thanks to increasing prices. However, Black Friday sales rose 2.3% over 2021, and early numbers revealed that overall retail sales were up as well, which seems to contradict those early predictions.
While we hope the holiday peak was your most wonderful time of the year, the following information will help even if your sales department got a lump of coal in its stocking. By looking at your successes and struggles from the 2022 peak season, you can gain insights that will help you weather the next retail storm. Here’s how:
Use data to your advantage
If we’ve learned anything from the past three years of upheaval, it’s that visibility is crucial to a healthy supply chain. But gathering mountains of data isn’t enough. You have to use your data to create better forecasts and make your business more agile.
Data analytics can help with all aspects of your business. However, here are some of the biggest benefits:
- By looking at this year’s data, you can spot trends like slower final-mile delivery from a particular distribution center or frequent out-of-stock issues at a retail store (which can result in lost sales). With this information, you can reposition inventory ahead of the next peak to better respond to future challenges.
- Good use of data can help you spot pinch points in your fulfillment process, enabling you to use tools like route optimization to improve last-mile logistics.
- You also can use data trends to plan batched and routed deliveries to improve efficiency and avoid costly delays.
- This year’s data can help you plan for next year’s expenses and decide which costs you must pass on to customers.
Turn data into goals
With last year’s data in front of you and challenges identified, you can build a roadmap of goals you want to achieve for the next peak. Which goals you set depends heavily on the trouble spots identified by your analytics and your overall business priorities. Key performance indicators (KPIs) you may want to focus on include:
- Inventory and order picking accuracy. Having the right inventory in stock and getting the right products into the right places is crucial. Backorders, returns and slow delivery can all result from poor inventory management — and all can sour a customer on your brand.
- Order picking speed. Did one distribution center struggle to keep up with orders? Do you have a bottleneck in one leg of your fulfillment journey? Spotting these challenges can help you decide whether you need to hire a bigger seasonal staff for your next peak, rearrange your warehouse to make finding inventory easier, or take other steps to streamline the fulfillment process.
- Inventory turnover. Do you have products that collect a lot of dust before moving out of your warehouse? Other products that you struggle to keep in stock? These metrics help you better plan your warehousing space utilization and show which markets are selling more of which products so you can reposition inventory effectively.
- On-time delivery. As one of the most important numbers for any retailer to track, this metric tells you in no uncertain terms how your last-mile delivery process is doing. Is a particular carrier consistently late with deliveries? Does that track across their whole network or only within a particular service area? Answering these questions makes it far easier to decide on your ideal delivery partner mix for the next peak season.
Effective goals are specific, measurable, attainable and above all, documented. Once you’ve decided on KPIs to aim for next season, your entire team needs to work toward them. Whether it’s choosing the right solution for every delivery or providing additional training to warehouse and customer care teams, everyone needs to be aware and mindful of the milestones and metrics they should be trying to hit.
Start making improvements early
The best thing you can do to ensure success for your next peak is to start making data-based changes as soon as possible. With the data you’ve collected and analyzed, you can look for new solutions and start making corrections where necessary.
You should also start re-negotiating with delivery partners now, before the next supply-chain challenge throws you another curveball. Here’s why earlier negotiating is better:
- It helps you land more favorable contracts well in advance of peak season and lock in the best services and and most efficient delivery partners for the best rates.
- It leaves you plenty of time to test out your new solutions, programs and processes well in advance of your next big shopping season.
One of the changes you should consider is exploring options for same- and next-day local delivery. Speedy delivery times are more attractive than ever to customers, and thanks to crowdsourced solutions like Roadie, you can add these options easily. Crowdsourcing offers a customizable solution – you can start small with a highly localized service and expand as interest grows.
Diversify your supply chain network
The COVID-19 pandemic showed all the ways supply chains can go wrong. From lockdowns to the whiplash effect of inventory shortages followed by inventory overstock, organizations had to get creative to solve ongoing challenges.
Diversifying your network, from suppliers to carriers, can allow you to bring some sanity back into your operation. Having multiple options along your entire supply chain helps you avoid future disruptions.
Diversification isn’t just about choosing which delivery partners and carriers to work with. It’s also about which delivery models to offer your customers. Hot-shot shipping, buy online, deliver from store (BODFS), delivery from distribution centers versus retail locations — all these decisions can help you meet different customer needs.
If one of your big challenges is uncertainty around customer demand and inventory placement, crowdsourcing can be your best friend. Easily scalable, crowdsourced delivery can help you quickly get products into customers’ hands, sometimes within hours. It can also help you reposition inventory on the fly, so you can ensure products are where customers expect to find them.
Apply lessons throughout the year
The most powerful benefit that comes from taking these steps is that they’re not just for the end-of-year holiday season. You can apply these lessons to all higher-volume times throughout the year, including Valentine’s Day, Mother’s Day, Father’s Day, summer travel season and home-improvement season.
Adding crowdsourced last-mile delivery is especially helpful for these smaller peaks. By having an on-demand delivery platform specializing in same- or next-day orders, you can tap into additional capacity when you need it to easily handle changing customer needs all year round.
Along with the other lessons — harnessing your data, rate shopping early and network diversification — crowdsourcing can take the stress out of your 2023 peak seasons.