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Is your supply chain prepared for the 2020 holiday season? Learn how to combat shipping challenges presented by major disruptions, like COVID-19.
Did you know that consumers online spent 7% more in April and May this year than in the holiday months of 2019? In April and May, e-commerce spending rose by over $10 billion.
Disruptions like COVID-19 affect buying habits and, therefore, also affect the supply chain process behind-the-scenes that pick, pack, and deliver products. With retail stores closing due to the pandemic, online shopping is increasing more than ever. So, it is vital that your company accommodates consumer spending habits.
Already, we’ve seen Memorial Day sales of this year significantly rise compared to 2019 with a 63% growth. According to Adobe’s digital insights manager, surges in e-commerce spending like this are uncommon, especially in periods outside the holiday season.
E-commerce spending will likely continue to skyrocket this year during the holidays, like Hanukkah, Christmas, and New Year's. Due to the pandemic, companies must accommodate their logistics to meet their consumers’ spending habits. It’s highly recommended that you prepare your logistics as much as you can to properly face peak shipping season.
But first, let’s unpack these problems!
What are the 2020 Holiday Season Shipping Challenges?
Not only do companies face challenges brought by the pandemic, but they also must tackle the volatility of the holiday buying season. Here are a few problems presented by COVID-19 that will potentially impact the holidays:
Not enough inventory to meet consumer demand.
A small change in customer demand can cause massive inefficiencies up the supply chain, in other words, the bullwhip effect. For example, panic-buying in the early weeks of the pandemic caused massive shortages of essential products and surpluses of non-essential products in some industries. To meet holiday demand, you must avoid low inventory.
Reduced staff in warehouses and fulfillment centers.
During a time of rising e-commerce spending, many companies require all hands-on deck. But with quarantine and social distancing regulations, companies are required to send employees home for the time being. Businesses face the challenge of keeping the supply chain running while protecting their employees, especially during the holiday season with a higher volume of shipments.
Low focus on customer experiences.
The sharp rise of online spending reveals inefficiencies in a company’s ability to deliver positive customer experiences. In the past few months, one in four consumers say that they’ve had a negative online shopping experience. The reasons range from undesirable fulfillment options to poor user-experience on the e-commerce website. You can’t retain loyal customers without providing them the experience that fosters trust. We recommend providing your customers a good experience especially during the holidays so that they’ll readily return to your business in the future.
High consideration for health and safety throughout logistics.
To keep supply chains running, companies must ensure the safety of their employees, customers, and products. This can entail a revamp of their processes to include regular and thorough cleaning of work environments, protective gear for employees, and more. Re-organization of the supply chain is an added cost but without it, you risk your company staying in business and successfully making it through the holiday season and beyond.
It’s even more important for you to fulfill customer demands during the holidays when swift and timely delivery is crucial.
What You Can Do to Overcome 2020 Holiday Shipping Challenges
Now that you know what challenges you’ll be facing, it’s time to learn how to optimize your logistics to successfully make it through the 2020 holiday season. If it wasn’t in your plan already, digitization of your supply chain will strengthen its processes to be resilient against potential disruptions in the future.
Enable real-time visibility into the supply chain process.
A major step in building a resilient supply chain that can handle the demand for holiday shipping is gaining transparency and real-time data of all parts in your logistics. Greater visibility of your supply chain grants you the ability to control each stage of the product lifecycle. With that level of control, your business can resolve issues in real-time to keep your supply chain running smoothly for the holidays.
In addition, real-time visibility of your data allows for predictive technology to accurately forecast demand for your products, so you won’t have to worry about running into issues of low inventory during the holiday months. Smart technology and integrated shipping software are just what you need!
Diversify suppliers and freight carriers.
Don’t put all your eggs in one basket! With a dependence on just one or a few suppliers and carriers, you run the risk of not meeting customer demands. It’s a risk to lean heavily on new partners but this global disruption has shown how important it is to diversify new business partners and enable a flexible supply chain. You’ll be able to handle the demand of the holiday season with additional partners to avoid slowing down your logistics.
Seamlessly collaborate between suppliers and carriers with technology.
Everything has been moving online for a while now, but online is more prevalent than ever with employees working from home. It's important to communicate with your suppliers and carriers in real-time to handle enable faster action while facing disruptions. A free flow of information will help you accommodate issues your business will potentially encounter during the holidays. Communication is critical to building a strong and flexible supply chain.
Expand on e-commerce strategies.
As businesses progress more and more online, e-commerce trends are something to keep an eye out for. Finding new ways to deliver positive customer experiences or simplifying the supply chain is especially useful to handle the holiday months. We’ve compiled some recommendations for you to consider. Of course, pick and choose your strategies to best suit your company’s goals; not every strategy is right for your business!
How Holiday Shipping Challenges Can Cause Cart Abandonment
Customers can abandon their shopping cart due to fulfillment reasons, like shipping costs and lengthy delivery times.
Consider these options to resolve holiday shipping challenges:
- Buy Online, Pick-up in Store (BOPS): Use this tactic to give an extra option for your customer to be satisfied with, creating a positive experience. Luckily, companies with or without a brick-and-mortar location can use this strategy. For example, Amazon’s partnership with Kohl’s offer BOPUS services.
- Expand carrier options: Having more options can drive down shipping costs and delivery times. It allows the customer to decide which delivery time and cost they’re happy with. Make sure to build strong relationships with new carriers to ensure they’ll handle your shipments with care!
- Alternative last-mile delivery: Like expanding carrier options, multiple options for last-mile delivery fulfillment can spread out the high volume of holiday shipping. Companies like Amazon are experimenting with autonomous delivery like robots, drones, and driver-less vehicles. This new wave of technology is on the horizon and it doesn’t hurt to get a head start on expanding your options for even faster delivery.
For more information on how to combat against COVID-19, check out our on-demand webinar on how SAP shipping and IoT can protect your supply chain processes and your warehouse workers. In addition, check out more supply chain strategies that prepare your logistics for fluctuations.
Supply chains worldwide are already adjusting to volatile demand and high e-commerce spending due to the pandemic. For the rest of the year, shipment volume is only going to rise from here, especially during November and December. You may face challenges with limited staffing, unpredictable demand and supply, and health and safety precautions.
Tackle these challenges head-on with smart technology and e-commerce strategies that will allow real-time visibility of your supply chain and greater collaboration with diverse suppliers and carriers.
Are you ready for the holidays?
