The holidays traditionally come with a spike in sales for retailers. This past holiday season was no different — the fourth quarter of 2016 yielded a 17.8 percent jump in online sales. Projections for 2017 are nearly as high.
However, to prepare for the mad rush that is the holiday season, you need to get started now.
Whether you’re selling on Amazon.com or through your own e-commerce site, it’s important to make sure you stay ahead of the game. If you get behind, you risk missing the boat entirely.
One of my clients at ShippingTree faced this problem last year. This client had a product go viral, selling it to more than 10,000 customers. Great news, right? Well, not so much. The company had ordered only 4,000 units for its inventory, and it wouldn’t receive more from the supplier until the end of November. To make things worse, the company had no back-end infrastructure to track payments or customer address changes.
We were able to help the client work out its back-end problems and ship out the merchandise it did have, but that couldn’t save it from a nearly 15 percent canceled-order rate due to the delays caused by overselling.
With a little preparation, you can avoid a similar issue. Start now by implementing these five tips:
Crunch the Numbers From Previous Years
Analyze your sales from previous years, and compare those to your projections for 2017. Not only does this give you the inventory data you need, but it also gives you an idea of website requirements. In 2015, Target received an unexpected web traffic load during peak holiday shopping and had to shut down its website for more than two hours.
The last thing you want is to lose customers and revenue due to poor performance, especially during a season as critical as the holidays. As you end the second quarter, it’s time to conduct load testing with your predictions of traffic volume.
Get Suppliers Prepped and on Board
Unfortunately, the holidays can result in costly supply chain disruptions. A sudden spike in demand puts a strain on the supply chain, requiring human involvement to handle the issue. This slows down procurement, impacts customer support and eats away at profits.
Align all parties involved to ensure that doesn’t happen. As an online retailer, you might ship straight from the manufacturer or other suppliers. Make sure you’re on the same page in preparing for your holiday rush. Get on the phone, provide them with your inventory projections and ask how they’re prepared for the holidays.
Sign on the Dotted Line With Third-Party Vendors
Retailers have agreements with a variety of third-party vendors to ensure a smooth process. Review and finalize those contracts, keeping an eye out for anything relating to the holiday season. Amazon.com announced last year, right before the start of the fourth quarter, that new sellers would be blocked from the Fulfillment by Amazon centers until the first quarter of 2017. Thousands of merchants were affected because they had waited too long to set up their accounts and get inventory into Amazon’s warehouses.
Whether it’s a service, vendor or manufacturing agreement, this is the ideal time to review contracts. Determine whether you’ll be staying with these third parties, and evaluate new ones to prepare for the holiday rush.
Review Shipping Options and Lock in Rates
E-commerce retailers face increasing demand for free shipping options, which significantly impacts their bottom lines. Shippers’ margins are also falling because it’s more expensive to deliver to a home than a business. Reuters suggests a shared solution by implementing space-saving packaging to improve density packing within delivery trucks.
2017 projections also include precise delivery (within a one-hour window) and next-day shipping options for most retailers. This means you need to analyze all shipping options and lock in rates before they increase.
Budget for Increased Customer Service Concerns
A spike in sales brings a spike in customer service calls, and that’s something you can’t skimp on. You’ll need to account for that with extra customer support on staff.
Keep in mind, too, that customer service has changed over the years. It’s less about answering phone calls and more about responding via social media or live chat. Social media seems to be a place for criticism; most brands have accounts and can be tagged.
Some customers expect a response within 30 minutes of voicing a complaint via social media, so you need someone devoted to monitoring those accounts. Online chat is also important. An eDigital Customer Service Benchmark study revealed 46 percent of people who used online chat for customer service considered it the most efficient communication method available.
The opportunities available for holiday season preparation are endless. The fourth quarter will make or break your year, and the systems you put in place, along with the time and effort you invest in planning, are what will make you stand apart from the herd.