Holiday Prep For Peak Order Volumes

By David Anderson , Vice President of Marketing, SalesWarp

Okay, I know its March and the holidays are a long way off (or thankfully far behind), but it’s a well-known fact that the holidays are a key two-month time period for the retail industry. According to statistics from the National Retail Federation, sellers win as much as 40 percent of their annual sales during the holidays, which makes it absolutely essential that they run a tight ship during this peak period. Any failure, whether it’s related to infrastructure or company procedures, can result in significant opportunity loss and missed sales.

While mistakes and mishaps during the holidays need to be avoided at all cost, they can also be rather enlightening. The sheer number of people shopping during this two-month time frame and the volume of activity during the holidays can help illustrate many issues with a retailer's operations that may go hidden when not under the stress of peak periods. With the 2015 holiday season still many months away, now is the optimal time to look back at the 2014 season and use lessons learned during the peak period to drive meaningful change for the future. One area for improvement, especially for online and omnichannel retailers, is handling the massive uptick in order volume that happens during this time. There’s a lot you can do to prepare, and it’s best to start by taking a thorough review of the 2014 holiday performance.

Infrastructure review

The first step is to take a look at the infrastructure that powers the processes and overall operations. This means factors such as the servers your website and retail management software are hosted on, and performance in terms of information processing speed and website loading times. It doesn’t matter what tools retailers use if they get bogged down and are made functionally irrelevant as a result.

One common example of infrastructure failure that many retailers face, big or small, year after year, is website downtime. Whether due to a targeted cyber attack or simply because hosting services crumble under the duress of heavy traffic, downtime can be costly. One study conducted by the Ponemon Institute suggested retailers can lose up to $8,000 for every minute they are offline during the holidays. Yet every year many retailers encounter this issue, simply because comparable order volumes do not get tested during any other time of the year.

While the impact of infrastructure failure of consumer-facing technology can be devastating, it can be equally bad when it affects backend processes and operations as well. Many retailers operate in real-time, so even minimal delays in order processing and inventory management due to slow servers can have a serious negative impact on the business and the brand.

If merchants want to improve their ability to process orders during peak periods, it starts by reviewing infrastructure, simulating high order volume testing and making the right technology upgrades.

Process review

Another area in which retailers get bogged down is with the various internal procedures put in place. In normal conditions, these processes may function perfectly fine, but under pressure, they can negatively affect efficiency and more importantly, the overall customer experience.

A prime example of process failure is with customer service. It is not unusual to see long lines at registers or customer service areas in your favorite retail stores, or experience long waiting times on calls during the holidays, particularly when it comes to returns and exchanges. Many merchants and online retailers are equipped to handle exchanges, but after the holidays when large numbers of people are returning gifts for refunds and exchanges in a short amount of time, manual or inefficient processes can result in slow resolution times and very disgruntled customers. It’s these types of experiences that make a difference to whether your customer is posting a positive or negative comment on social media about your brand.

Fortunately, there are always ways to make processes simpler and it generally starts by improving cross-department communication and implementing technology that can improve and even automate processes to reduce the chance of procedural failure.

Operation review

The final area retailers need to review to prepare for the peak holiday season is operations. Activities such as order fulfillment are put to the test during the holidays, as consumers shop on a variety of channels and expect fulfillment options to meet their needs. Warehouse employees look to pick, pack and ship products as quickly as possible to keep up with the influx of online orders. In-store associates need to have access to cross-channel inventory to “save the sale”. No one likes it when Santa is late or out-of-stock - it results in angry customers and may eliminate any chances of repeat purchases in the future.

In the warehouse fulfillment center, retailers must review methods for receiving, managing, and picking inventory. Look for improvements by deploying new technology such as wireless barcode scanners and mobile devices that give on-the-go access to inventory management software. For the 2015 holiday season, automation is the key to pulling ahead in the race to pack and ship orders in the most accurate and efficient manner. Gone are the days of processing shipments manually and keying in tracking information after the fact. During the review of 2014 holiday operations, retailers should integrate shipping into their order management software, and negotiate rates with carriers ahead of time.

In addition, merchants with retail stores must have the ability to fulfill from any store, allow customers to buy online and pick up in-store, as well as buy in-store and ship to home from another store location. This cuts down on operational costs, inventory management and speeds up fulfillment time. This holiday season, retailers need to utilize inventory wherever it may be located, and this requires a system-wide view of inventory across stores, fulfillment centers and dropship vendors.

The holidays may still be months away, but it is never too early to start preparing. Merchants should start by looking at what they could have done better the past holiday season and take a critical look at their infrastructure, procedures and operations as places to find improvement.

About The Author

Avid Triathlete and Vice President of Marketing for SalesWarp, David Anderson brings a unique perspective to the eCommerce and retail industry from a creative, branding and marketing background that encompasses 25 years. He is a frequent publisher to the SalesWarp site, has contributed to eCommerceInsiders.com and other industry publications. You can find him on Twitter @DABrandman or Linkedin (linkedin.com/in/davidanderson4).