Expect shoppers to start their holiday retail experience earlier this year. Many retailers have already started. Walmart put out its annual toy catalog in August this year. Christmas displays were even popping up in some brick-and-mortar locations throughout October. A Salesforce survey indicates that 37% of shoppers plan to shop early this year despite economic concerns. Worries about stock levels and getting items delivered on time are having an impact. We consult logistics experts for advice.
Force by Mojio Ops Director, Kyle MacDonald, says:
“For the 2022 holiday season, the earlier you can start offering holiday deals, the better your holiday sales will be. Because there are still delays in shipping, customers are starting their holiday shopping earlier this year. Offering earlier deals will help you increase your profits as much as possible in this tough economy.”
With shoppers in the market earlier than usual, that means ordering earlier.
Bellhop Las Vegas Movers Sr Ops Manager, Roland Foss, puts it this way:
“While the supply chain has been much more manageable in late 2022 than it was in the first half of the year, it only takes one typhoon, strike, COVID outbreak, or other problem to put your shipping behind schedule.”
It’s a good idea to expect delays and plan accordingly. Although capacity issues have started to resolve for many carriers, they are expected to tighten up again as holiday orders get fully underway. At the same time, many carriers are still struggling with driver shortages, limiting availability.
Supply chain issues have also impacted the trucking industry regarding parts and equipment. Anything that uses chip technology has been severely impacted.
Kaiyo Brand Director, Grace Baena, points out that:
“Supply chain shortages will continue to disrupt shipping this holiday season, with many shippers still operating without full truck fleets due to parts and staff shortages. One way for high-volume shippers to avoid delays is to rely on shippers who are known to have fully staffed fleets—at least for particularly high-ticket orders.”
Because of the erratic nature of the supply chain, retailers also need to evaluate inventory levels carefully. A lack of inventory rather than a lack of sales may skew historical sales data.
Consumer Gravity Co-founder, Paul Mallory, advises:
“Since supply chain disruptions are still at large, there will be many problems this season. Large-scale orders are going to start coming in early, and space is going to be limited. So, the best course of action is for businesses and shippers to look at past trends. They should only order products that have shown strong sales numbers. This will save them money and get their orders shipped in early.”
Mallory also says that high-volume shippers need to consider the continuing driver shortages, delivery delays, and higher shipping costs in general.
Before we get into full swing, shippers should talk to their carriers to ensure they can handle the volume.
Classic Car Stereos Owner, Jeff Vogl, says:
“Make sure you know if you have a capacity limit. Will your shipping carriers not pick up if your volume exceeds X? Some newer brands and shippers that are self-fulfilling might have a very successful holiday sale, but it is important to communicate that forecast to your shipping carriers so that they can anticipate the surge in demand/capacity.”
Vogl also suggests taking a closer look at peak surcharges in your contract. Talking about these with your rep now can help eliminate surprise charges down the road. He also says to examine capacity overcharges:
“Are there capacity overcharges in your contract? Sometimes carriers may offer your discounts up to X amount of package volume per X amount of time. Above those volumes, you are getting hit with either surcharges or discounts that may not apply. It is important to know those and understand how they might impact shipping costs.”
Consumer complaints about late deliveries and higher-than-normal levels of stockouts have risen, and so have complaints about damaged merchandise.
RevenueGeeks Co-Founder, Elisa Bender, says it’s worth checking your packaging to make sure it’s robust enough to handle potential damage:
“With the holiday season approaching, I’d advise you to properly package your products. Damage is inevitable in this busy time in the freight business. So, it’s better to take matters into your own hands and lower the risk of damage. This way, you won’t have your inbox filled with unsatisfied customers with their purchases.”
Damaged goods have significant costs. Not only do you have unhappy customers, but you also multiply your shipping costs by handling reverse logistics and the replacement of goods.
Soxy eCommerce and Retail expert, Jessica Kats, agrees:
“Don’t skimp on packaging. Make sure to properly pack fragile items and label them with a ‘handle with care’ sign. Don’t forget to set up freight claims in case of damage.”
Many retailers have had issues with overflow inventory clogging up existing warehouse space due to inconsistent supply chain delivery schedules. You’ll want to make sure you have space available. Foss adds:
“If you haven't already invested in warehouse space to store products stateside, it's an excellent idea to help smooth out shipping delays, especially around the holiday season.”
Vogl also says you need to coordinate between sales, marketing, and fulfillment centers, so everyone knows when sales start and end. He encourages that you:
“Communicate any labor and capacity concerns with marketing so that they don't put the fulfillment center in a bad spot. Typically, the earlier the promotions start, the more spread out the orders are, and the easier it is to manage the spike. There will always be the peaks on specific days, but anything that can be done to flatten it out helps the warehouse and fulfillment.”
Consumers today expect fast delivery and easy returns for everything they order. When the information isn’t readily available or complicated, it often leads to cart abandonment.
Survival Gear Shack Founder, Max Shak, suggests you create a shipping and returns page on your site and go out of your way to ensure customers know your policies:
“You should be upfront about how long shipping will take if you cannot guarantee same-day shipping so that you can set expectations. It's just a matter of telling your customer when to expect their package. Clarify! Not having a clear shipping timeline can be enough for customers who are shopping online to abandon their carts. Many people have a hard time pulling out their credit cards from their wallets. Make sure they have no reason to refuse.”
Vogl says you’ll need to have a plan in case unforeseen problems occur:
“As shipping deadlines approach, what do you do if the carriers are not hitting and will not honor their delivery dates for express orders? If a customer pays to overnight an order because they waited until the last minute, but the carrier doesn't deliver and won't honor the delivery date for the service, how will you handle that from a customer service standpoint? It is better to establish the policy, train customer service, and edit website copy now to establish and ensure that customer expectations are met.”
Clear communication is key. Delays at this time of year can cause significant problems. Since holiday sales can account for as much as 30% of a retailer’s annual sales, ensuring a constant flow of information about deliveries is critical for shippers and customers.
Kristi Smith, Editor-in-Chief & Operational Manager at Honest Brand Reviews says:
“High-volume shippers should provide constant updates to clients. This information can include the product’s tracking code. This allows individuals to determine the item’s location and when they can expect it to be delivered. It’s a win-win situation for both parties as companies can keep a record of data and improve business processes.”
For retailers, better communication with customers about shipping and tracking also eases frustrations and reduces calls to support centers.
When you are handling large volumes, it can be easy to forget to document everything about all of your orders. Bender says:
“Jot down everything before shipment. This can help pinpoint mistakes easily. Automating the process is better, so there is no chance of human error. You can create a transparent environment during high-volume shipping.”
This also provides the documentation you need to do freight audits to avoid duplicate billing and charges, tax rates, and other errors. Kats says:
“Make sure you carefully fill out the Bill of Lading (BOL). It’s an important document that ensures smooth shipping. Don’t throw away the final freight bill or invoice from the carrier, and write down every piece of information about the product being shipped. Delays are already expected this year. So, being careful about these little things will help you avoid any freight shipping obstacles that may arise.”
As retailers and other high-volume shippers gear up for the holiday season, there’s still a fair amount of uncertainty. Experts expect shoppers, worried about continuing supply chain issues and delays in shipping, to start earlier, so retailers need to do the same.
This holiday shopping season looks to be different from others. Due to the pandemic, uncertain supply chains, and inflationary concerns, retailers can’t afford to miss out on any opportunities to generate revenue.
Deloitte predicts 2022 retail sales to increase between 4% and 6%. Make sure you’re ready.
Are we facing a full blown-out recession? Experts' views are mixed. Join our powerhouse logistics webinar panel Wednesday, Nov. 16 10 AM PST, to discuss what the industry is saying, and what you should prepare for in the event of a severe economic downturn.
Our panel includes:
Our panel has a wealth of logistics and c-suite experience and encourages calls, discussions, and questions on how to streamline operations and reduce costs in the face of our current freight and shipping challenges.