Top 4 Holiday Season Pitfalls Retailers Face This Year (and How to Fix Them)
Navigating the holiday season within the constraints of the “new normal” has proved challenging for many top brands and retailers. The pandemic has driven a sharp uptick in e-commerce demand, which will not ease up throughout peak season; in fact, 66% of shoppers plan to increase their online purchases during the 2020 holidays.
Meeting these unpredictable demands while exceeding customer expectations is more difficult in a COVID world. Retailers should embrace flexible fulfillment offerings and omnichannel technology that helps them address the supply chain disruptions driven by the pandemic, while maintaining customer loyalty. Here are four top peak holiday season pitfalls retailers are facing this year and best practices for navigating them.
1. Inventory management has become more challenging
With stores and warehouses opening and closing unpredictably due to government mandates and outbreaks, order management systems (OMS) have become a necessity for minimizing order delays and allocating stock. If a fulfillment location shuts down for any reason, retailers should use routing rule configurations to allocate products to less impacted locations. Retailers should leverage data from last holiday season, or earlier in the pandemic, to determine demand hot spots, so inventory can be positioned in the optimal place and stores can be staffed appropriately.
The need for global, cross-channel inventory visibility is crucial. When inventory is not properly placed, order fulfillment costs increase with split shipments and expedited transportation. Retailers need to know what they have on hand in distribution centers, in stores, what the Available-to-Promise (ATP) is in all locations, and account transit times. In these dynamic times, especially during the peak holiday season, being able to accurately meet consumer expectations starts with inventory visibility.
2. Incorrect use of automation
Automation and robotics in the warehouse are taking off this holiday season like never before. There are many benefits to automation, especially from a safety and efficiency perspective. Autonomous Mobile Robotics (AMR) can assist associates on picking, packing and shipping orders, while complying with socially distanced headcount capacities and reducing teammate interaction.
In addition to the safety benefits, Radial has found in our fulfillment centers that associates are twice as productive with the robots assisting, as they are able to eliminate non-value-add steps in the process, such as walking distance.
However, retailers cannot rely just on automation to help scale their workforce for peak season. This is a common pitfall, as brands need to make sure they have the necessary throughput and ensure there is enough labor — manual or automated — to get orders out the door.
Robotics still have limitations in applicability, as they are generally programmed for singular flow. People are more adaptable in handling different products or exceptions to rules-based tasks. Savvy retailers have realized they still need to scale their workforce significantly for the holidays and should view robotics as a value add in assisting associates, not replacing them.
3. Curbside pick-up challenges
Retailers are facing unprecedented demands for online orders and as a result, they are prioritizing buy-online-pickup-in-store (BOPIS) and curbside pickup (BOPAC) options this holiday season. Research shows that customers appreciate these safer, socially distant shopping options, as 40% of respondents in a recent survey said the availability of an online-to-store fulfillment option made them more likely to purchase from that retailer. However, many retailers still don’t have the technologies (e.g., order management, store fulfillment) or processes in place to execute this seamlessly.
To accommodate this uptick in popularity, retailers need omnichannel technologies that provide flexibility and scalability for different fulfillment models. Retailers must also prioritize properly training store associates to efficiently address BOPIS and BOPAC orders. Brands may even want to completely re-examine their brick-and-mortar store set-up to create clear, designated areas for easy product pick-up.
4. Delivery timelines are impacting customer care
Delivery delays during the “new normal” are inevitable, and customer care inquiries have risen as a result. Retailers need a strong customer care strategy in place to handle this inconvenience. Shoppers prefer brands that provide visibility and transparency with their deliveries, during every step of the order journey.
Overcommunicating with customers every step along the way will reduce calls to customer service. Placing fulfillment delay messages on websites, the header of item pages, checkout pages, and confirmation emails are easy ways to make sure shoppers are aware of fulfillment timelines and any delays.
Retailers also need to be direct about longer time frames for refunding returns, and make sure customers are aware of the increased strain on returns and refunds. While delivery delays are a challenge, retailer transparency will pay off and improve shopper loyalty.
Retailers who are able to align their omnichannel strategies with expectations of the COVID-19 consumer will have strong results this holiday season. After months of relying on digital options, it’s only expected that shoppers will be drawn to the retailers that seamlessly deliver a consistent experience across all channels. To make sure gifts get to the doorstep in time for the holidays, omnichannel technology has become a necessity for retail survival.
Prashant Bhatia is senior VP, technology services at Radial.