By Ted Rogers, chief marketing officer, Digital River
In a year turned upside down by a global pandemic and economic uncertainty, this holiday season is shaping up to be very different for e-commerce brands. According to data from daVinci Payments, 71% of US consumers plan to do more than half their holiday shopping online this year. Salesforce data showed a similar shift in shopping preferences, with 47% of US adults saying they are more interested in shopping online this holiday season than last year. This new groundswell of online activity presents both an immense opportunity for brands and new potential challenges.
A holiday season with the potential for online volume unlike any other puts companies in a favorable position to drive record-breaking sales and attract new customers, but it may also put tremendous strain on fulfillment and customer experience. Many merchants are still adjusting to new online shopping habits and increased volume in the wake of COVID-19 on top of the USPS delivery slowdown and now an impending online-heavy holiday shopping season. This trifecta of events could lead to a perfect storm if brands don’t plan appropriately.
As we saw early in the pandemic, supply chain and fulfillment challenges severely impact customer experience. With store closures and reductions in staff due to health mandates and global supply chain delays, many businesses struggled to meet inventory demands and delivery expectations, leaving customers frustrated. As we head into the holiday season, it’s projected that last-mile delivery will likely exceed shipping capacity by 5% globally, potentially delaying up to 700 million holiday packages.
With all of this coming to a head, how can merchants best prepare themselves? While there isn’t a silver bullet, it starts with having conversations with all key stakeholders, getting a head start on planning, and truly understanding how each facet of your plan will work with the next.
Using the following tactics and strategies — and consulting resources like Digital River’s Holiday 2020 Ecommerce Readiness Guide — will help ensure a smoother holiday shopping season across your fulfillment and customer experience.
Talk with your distributors and fulfillment partners early and often
Reach out to your fulfillment partners to determine their plans should they experience delays, and find out what their projections are for the peak holiday season. Investing time in these relationships can pay big dividends as you’ll need to know about any changes as soon as possible to respond accordingly.
Plan for early promotion spikes
Because many companies’ promotional calendars will likely be different this year, the demand for products is likely to start earlier. This could cause queuing or other issues in warehouses and distributors that support multiple brands, so make sure you devote additional time and resources to managing inventory and fulfillment.
Have a surcharge strategy ready
With carrier surcharges expected to continue this year, start developing strategies now for how you want to account for these additional costs, either absorbing them or passing them on to customers.
By now, many consumers are aware that the pandemic might cause delays in shipping. Expectations have changed, and customers want clear, honest information in real time. So, if you’re experiencing delays, be upfront and transparent about it. Let them know if an unexpected delay occurs before they start wondering and asking customer service why their product hasn’t arrived as scheduled.
Incentivize against cancellations and returns
If your product might be delayed until after the holidays, offer an extra incentive to encourage customers to go ahead with their purchase. Whether in the form of an additional product or future offer, a bundle or bonus can keep customers engaged with your brand, prevent canceled purchases, and are generally much less expensive than dealing with returns.
This is certainly an interesting and challenging year. By having a plan in place to deal with the opportunities and challenges this holiday season, brands will capitalize on more opportunities and mitigate more of the risks.
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