As a retailer, you’re only as good as your peak success – or failure. Operational issues that occur sporadically throughout the year tend to explode during peak. The repercussions can be felt for a long time.
To illustrate, here’s a personal anecdote. For 10 years I relied on a leading provider of holiday-themed flowers, plants and gift baskets to send gifts to friends and family. They provided a consistent experience and went above and beyond if I wasn’t satisfied with a shipment. I was a loyal customer.
My loyalty was tested last year when I purchased something for myself during peak season. The shipment didn’t arrive on time, and the merchandise was poor quality.
I tried to resolve the problem through phone, chat and email. In every interaction I had to start from the beginning and explain the problem. Finally, I was told a replacement shipment was on the way. The replacement never arrived, and I never received any follow-up contact.
The result? I can no longer trust the brand for holiday gifts. I’ll never shop the brand again.
That’s why peak preparation is so important. If you lose a customer during peak, you may lose her for life. With that reality in mind, here are five steps that are essential to a successful peak season:
1. Start early. It’s never too soon to start preparing for peak. If your peak is during the year-end holidays, start planning in January. Look at how customers responded to promotions. Analyze your fulfillment performance. Take the measure of customer care. See where there were demand spikes and lulls. Determine what went well and what lagged.
Every function should get a peak report card. Evaluate each, and then look across them to see how they worked together. You now have the knowledge to course-correct for next year.
2. Create a calendar. You need a detailed peak calendar that covers people, process and technology. Inform all customer-facing associates of marketing campaigns – channel-specific and multichannel promotions.
Coordinate promotions with inventory receipts and retail distribution. Promotions like “spend over X and receive Y for free” is a great way to increase basket size – but nothing kills margin quicker than placing the free item in a separate fulfillment location. Communication and coordination are key.
3. Forecast! Your analytics tools provide insight to what happened last year and predict the future. You need to understand demand for each product or category, which geographic regions demand came from, and how (and how effectively) you fulfilled orders. Also measure sales lost because of a stockout or other problem.
Real-time insights coupled with machine learning can keep you nimble through the season. Creating a forecast for each day of peak and determining the placement of inventory across the fulfillment network will provide the best strategy for controlling split shipments and ensuring packages arrive on time.
4. Reporting and alerts. No matter how well you forecast demand, sales and inventory will be moving targets. Creating a set of reports or dashboards to quickly assess success and opportunity will arm you with the tools you need to react quickly.
Also provide alerts to specific individuals and distribution lists to ensure SLAs are measured and met. No customer’s order should be left behind.
5. Apply across channels. Finally, make sure peak preparations drive a seamless customer experience, regardless of order channel or fulfillment type.
The best way to achieve success is to establish an omnichannel team, with representatives from every function. The team should meet at established intervals so that no detail is overlooked.
Schedule a controlled test with a specific subset of promotions and SKUs. Assign staff to perform secret shopping. Try to uncover problems before peak begins. Issues that might seem minor off-peak can quickly snowball during peak. As you enter peak, keep an eye on analytics. Promotions might be achieving 110% of forecast, but on-time shipping might be falling short of your goal.
Look for areas where failure will be most apparent to customers – like whether products are in stock or BOPIS is fulfilled promptly and accurately. If you aren’t meeting SLAs, course-correct.
If you fall short of expectations, customers will usually forgive you if you then make it right. But if you’ve prepared for peak omnichannel, you’re more likely to get it right the first time.
Theresa Raczkowski and Brian Lindman are senior solutions consultants for Radial.