January 10, 2023
Planning for B2C and D2C: Fulfillment Factors that Made the Difference
Fears of a disastrous holiday for retail were overstated. While inflation was certainly a factor, holiday sales still rose a respectable 7.6% this year, a slower pace than the 8.5% increase from a year earlier. Consumer spending remained resilient during the critical shopping season despite surging prices on everything from food to rent. However, some consumer behaviors changed, including the fact that consumers began shopping early and shifted their spending categories.
Spending was robust from Thanksgiving Day through Cyber Monday, states a recent National Retail Foundation study. A record 196.7 million Americans shopped in stores and online during that five-day period. The study cites that the total number of shoppers grew by nearly 17 million from 2021, the highest figure since NRF first started tracking this data in 2017.
According to MasterCard SpendingPulse, “By category, clothing rose 4.4%, while jewelry and electronics dipped roughly 5%. Online sales jumped 10.6% from a year ago and in-person spending rose 6.8%.” Other noteworthy trends were that shoppers traded down to cheaper private label goods and shopped at less expensive stores like dollar chains and big box stores. Department store sales were disappointing, only rising 1%.
As we finally take a deep breath and look back at Peak Season, ask yourself — how did it go? What worked or didn’t work with your omnichannel fulfillment providers and vendors? Were there ups and downs? Are you still feeling the pain? Or are you happy with the results?
Those who “won” this Peak Season took some meaningful steps to prepare and execute. Those who “lost” probably didn’t plan early enough, create an accurate forecast, or take the time to align their needs with their fulfillment provider. In this blog post, we’ll walk you through a few key questions you can ask yourself to get a clear diagnosis of what drove your Peak Season results.
Did you begin your Peak Season forecast and planning in the summer?
It’s important to begin anticipating your B2C and D2C Fulfillment requirements long before Peak Season starts. It’s easy to get caught up in what you need to do in the now, thinking there is plenty of time to plan; but starting far in advance is the key to success. This year, analysts predicted that Peak Season would begin early, so planning ahead was even more crucial.
The biggest challenge for manufacturers and retailers is that it's always difficult to predict how much and where demand will spike. Supply chain issues and changing buying habits have made forecasts even trickier. Make sure you take the time to prepare a forecast for order volumes well before Peak Season begins, bearing in mind that you can always adjust it as conditions change.
Forecasting helps every stakeholder in your fulfillment operation get ready — from staffing/human resources to brand managers and beyond. It also sets the stage for what you expect to happen daily, weekly and monthly during peak season. Be smart about anticipating when special promotions and sales will run, and the demand spikes they will bring with them. In addition, be sure you share the particulars of your forecast with your transportation carriers — across the board from small parcel to LTL and truckload — so they have the capacity you’ll need ready.
Did you position your inventory centrally and close to the hotspots for consumer demand?
With the supply chain volatility we’ve seen over the past two years and the consumer expectations for getting their products faster than ever, this Peak Season’s most successful companies this season made sure to have the right inventory in stock and to deploy it closest to where they predicted it would need to be.
As part of your omnichannel fulfillment strategy make sure that the inbound inventory in your forecast — often coming from suppliers located overseas — will be at your domestic distribution centers in plenty of time. Work with suppliers to ensure you have enough lead time, so merchandise is received and ready for picking by the time your first holiday promotions and Black Friday unfold.
The first step is to stage inventory close to stores and consumer demand hotspots. In today’s ultra-fast, consumer-driven environment, it’s critical to meet consumer expectations for same-day, next-day, and as-soon-as-possible order delivery. Here are some ideas to get goods to consumers faster:
Did you set expectations with consumers about what to expect from the beginning — while they were shopping and ordering online?
Customer experience is one of the most important contributors to long-term success. Disappointed customers may or may not impact your revenue this year, but they’ll definitely have an impact next year because chances are good they won’t be back. After all, most of them have learned if they do not have a great experience, they can go elsewhere.
Technology is the key to a smooth omnichannel experience. Make sure your e-commerce order systems communicate accurate inventory availability, out-of-stock and back orders, and ‘ship-to-door’ timeframe before and during the ordering process. Doing this upfront enables customers to make informed purchase decisions and not be disappointed when an order arrives later than expected. Once again, giving them the option to pay for an even faster shipping method is also a best practice.
Did you collaborate with your fulfillment provider to plan from end to end — setting performance goals, and outlining key capability requirements, and expectations?
Having the right omnichannel fulfillment provider and making sure that they know what you require is critical. After all, they are the key to getting your product to your customers. By collaborating closely with your fulfillment provider, you can ensure they have an ironclad process for fulfilling your orders in a timely way. Some of the questions you’ll want to address include:
By making sure your provider is ready far in advance, you can be confident that your Peak Season fulfillment plan and expectations are clearly defined and understood by both parties. Together, you can identify any gaps or changes required and put action plans in place to solve them long before holiday promotions and Black Friday sales begin.
For more than three decades, Verst has fulfilled orders for customers during Peak Season, with a full range of B2B and B2C services in omnichannel fulfillment. We help large global brands and fast-growing companies in consumer packaged goods (CPG), food & beverage, and retail get to market faster by integrating and consolidating touchpoints across their fulfillment network. In 2022 Verst shipped almost 2 million orders including 21 million units with a 99.9% fulfillment accuracy. Best of all, our central fulfillment center locations in the Northern Kentucky and Greater Cincinnati area are strategically positioned to reach 85% of the U.S. population within 1-2 days.
Need more advice for an exceptional Peak Season fulfillment solution? Visit us online or call our fulfillment experts at 859-485-1212.
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