With customers shopping online more than ever before, the 2021 holiday season is shaping up to be a big year for ecommerce. Online sales in the US are predicted to rise 11.3% from 2020 numbers to $207 billion, accounting for a record 18.9% of total holiday season retail sales.
Getting a spike in orders is exciting, but keeping up with the demand can be challenging. What if you run out of inventory or you can’t ship your products fast enough? A negative experience during the holidays can damage your brand’s reputation and potentially lose you customers. It’s important your back-office and fulfillment strategy is ready for the influx of orders, so you can maximize on growth while delivering a great customer experience.
There’s still time to make sure your operations and fulfillment processes are in great shape. To help you prepare, here are some tips to ensure a successful holiday season.
1. Hire seasonal staff
Consider hiring seasonal staff who can help keep up with the demand and boost your back-office efficiency. You can adjust the size of your workforce to meet your specific holiday needs and save you money, instead of continuing to pay for full-time employees after the holidays. For Devin Montgomery, one of the owners of Skiis & Biikes, expanding their workforce during the holidays is essential to their business.
We add about 35% more staff every holiday season. This year, especially, it’s been very hard to find new team members. I feel every business is experiencing this. The main roles we are hiring are fulfillment (shipping, picking, drivers for transfers between stores, and receiving), customer service and online merchandising.
Don’t forget to onboard your new team so they perform at the same level as your full-time staff. Have a training plan ready to get them up to speed as quickly as possible. Create a checklist they can follow during orientation, with details about your products and brand, inventory and fulfillment processes, return policy, and what is expected of them.
2. Optimize fulfillment processes
It’s important to plan how, when, and what you will need to fulfill orders.
First, determine the best way to prioritize orders, so you don’t waste time figuring out where to start when you get a spike in sales. For example, you can prioritize orders on a first come, first served basis, and sort orders by date so you can quickly find your most recent ones. Another popular alternative is prioritizing by customer status. You might want to set up order or customer tags to identify orders from your VIP customers and fulfill them first. Or you can base it on the delivery method (ship, local delivery, or local pickup) or destination (international vs. domestic), so you know exactly what to do with those orders once they are packed. Once you know how you want to organize and prioritize your orders, save this view for the holiday selling season.
Stock up your fulfillment station
Prepare your pick and pack stations with all the necessary materials to package your products.
- Make sure your printer has enough ink and paper to print packing slips and shipping labels. Have refills ready in case you run out.
- Stock up on holiday-themed gift wrapping materials, stickers, and other promotional materials to offer a memorable unboxing experience.
- For a personal touch, write thank-you notes ahead of time to include in your packages.
- Provide packaging instructions for your staff to follow, especially if you have a variety of products that require different packaging and care.
Ensure order details are accurate
Make sure you have the information you need to fulfill orders as they come in. A best practice is to add the weight and dimensions to your products ahead of time. That way, when it comes to fulfilling an order you can easily pick the right packaging for the products in that order.
You may also want to double check product, customer and payment details. This is a good opportunity to reach out to the customer and make necessary changes to the order if something looks incorrect. Once all details are confirmed, add shipping and tracking information for each order.
Pick and pack orders more efficiently
Optimize your space for efficiency when it comes to picking and packing.
- Keep your station clean and organized, with top-selling products closest to your packing station and position them at eye level for easy access.
- If you know certain products are often sold together, keep them close by to one another.
- You should label your inventory with the product name, SKU and variant details such as size and colour.
- Store your products in separate shelves or bins so you can easily find the products you need to pick and pack.
Consider picking and packing many orders at once instead of one at a time. A great way to do this is to bulk select the group of orders you wish to fulfill, based on your prioritization process, and print packing slips. You can then use these packing slips to walk around your warehouse and pick the inventory you need for packing. Alternatively, you can use the Shopify mobile app to see product details from the order. With the same group of orders selected, purchase and print shipping labels.
Once you have your inventory picked and labels printed, create an assembly line of your packing slips, products, extras (branded materials, thank-you notes, promotions), and shipping labels, and get to packing your orders.
From there, you can schedule a pickup or drop-off with your courier to put the packages out for delivery. If your carrier is USPS, use the Shipping manifests app, so USPS can scan one document and receive the shipping details for a large group of orders.
💡TIP: Schedule recurring pickups to have carriers pick up your packages every day at your preferred time, or at your chosen intervals.
If you offer local delivery, set those orders aside and leverage our local delivery app to drop-off products in your community.
For local and curbside pickup orders, Montgomery says Skiis and Biikes optimize their space for these types of orders during the holidays.
Dedicating more showroom space to in-store pickup allows staff to find products faster.
3. Prepare your inventory
Your inventory must be sufficient and accurate. But not all your inventory performs the same way. To make informed decisions when ordering inventory for the holiday season, use an ABC analysis report to better understand which products drive more revenue. This report grades the value of your stock based on a percentage of your revenue:
A = % of stock that represents 80% of your revenue
B = % of stock that represents 15% of your revenue
C = % of stock that represents 5% of your revenue
Your A stock represents your most profitable and valuable products. Make sure you have these products on hand during your peak season so you don’t miss out on sales. Your C stock is your slow-moving or dead stock. BFCM is a great opportunity to sell these products at a discount to reduce excess stock. You’ll also want to order your inventory well in advance, to get ahead of any delays or disruptions in the supply chain.
You will also want to make sure you have an accurate count of inventory ahead of the holiday selling season. Consider doing an audit or a stock count of your existing inventory and be sure to update your inventory quantities as new inventory arrives. A great way to do this is with the scanning feature on the Shopify mobile app.
💡TIP: Implement a pre-order system in case you run out of stock, that way customers can still purchase the product but receive it only when you have it back in stock.
4. Expand your fulfillment capacity with a 3PL
Having a back office that’s connected to your inventory and order tracking is crucial for a successful fulfillment strategy. If you’re worried you won’t have enough storage space or your team won’t be able to handle the surge in demand, it might be time to trust a third party logistics (3PL) provider, like the Shopify Fulfillment Network. By outsourcing your fulfillment, you can hire experts that will pick, pack, and ship orders to your customers easily and quickly. As you explore bringing on a 3PL, look for a partner that has a vast network of strategically located fulfillment centers so you can save time and costs to ship your orders faster.
Learn more about 3PLs and how to determine if your business is ready to outsource fulfillment.
5. Use returns to create a memorable customer experience
Returns are an essential part of the online shopping experience. 68% of shoppers check the returns page before making a purchase and 52% have left a shopping cart out of fear of a difficult return process. As sales increase during the holiday season, so do the volume of returns. According to the National Retail Federation (NRF), merchants can expect the highest volume of returns in December, January and February.
First, put together a holiday-specific return policy that can help attract and convert customers. You probably already have one that goes over what products are eligible for returns, how soon returns need to be made, and the conditions products need to be in. Tweaking your return policy and extending the return window until after the new year is a great way to incentivize sales. For instance, if a customer buys a gift in October, they’ll want to feel confident that the person receiving the gift will be able to return the product after the holiday season. This temporary extension is a simple way to improve your customer experience and get them across the line.
Also make sure your return policy is clear and easy to find. This could mean creating a banner on your online store driving to your Shipping & Return Policy page or FAQ page. You could also include a link to your return policy in order notification emails and even on your product pages using the Dawn theme.
Next, become familiar with managing returns in Shopify, and put a plan in place to efficiently receive and process returns. With returns in Shopify, you can create return shipping labels, keep track of return reasons, restock inventory, and issue refunds, all in one place.
Finally, you will want to set aside an area in your warehouse to store returned orders, and dedicate a time of day or week to process them all at the same time. It’s a good idea to train specific staff to handle your returns as a way to avoid potential errors. You could display helpful guidelines in your returns area that go over how to check for damages and how to classify each order with a return reason, so you can continue improving your fulfillment processes over time.
Manage the holiday rush effectively
You still have time to optimize your fulfillment strategy for speed and accuracy. Plan ahead and continuously monitor processes that are within your control so that you can keep delivering a great customer experience, despite the challenges that come from a potentially stressful time of the year. Revise your fulfillment workflows, inventory availability, return strategies, and prepare your staff to ensure your peak fulfillment and shipping season goes smoothly.