By Maria Haggerty, president, Dotcom Distribution
More than 1,000 U.S. merchants will offer free shipping this Dec. 18 on all orders with guaranteed delivery by Christmas. Just six days before Christmas, free shipping day attracts troves of last-minute shoppers looking for a good deal and generated more than one billion dollars in online sales last year.
Free shipping day is a lucrative opportunity for retailers, but it’s not always smooth sailing, especially when dealing with complicated back-end logistics and warehouse management. There’s a great deal that goes on behind-the-scenes from the time a customer makes a transaction online until the package arrives at the doorstep.
As the last touch point in the customer experience, packaging and presentation plays a big role in post-purchase sentiment towards your brand and future loyalty. This presents a unique opportunity for retailers to win the hearts of new shoppers. But to transform first-time buyers into loyal customers year-round, you must provide an exceptional experience from start to finish.
Warehouse logistics and fulfillment preparedness can make or break retailers this holiday season. The best deliveries arrive on time, beautifully packaged and worthy of an Instagram post. However, poor packaging and late arrivals are prime targets for negative word of mouth – whether in person or across social media sites.
To give holiday shoppers a consistent, exceptional brand experience that translates to long-term increases in sales, make sure your warehouse, logistic and fulfillment operations are following a simple checklist for success.
Inaccurate forecasting is common and detrimental for warehouse processes, especially on peak days like free shipping day. When done properly, forecasting addresses a range of factors including scheduling, quality, staffing and delivery.
With just five short business days between free shipping day and Christmas, retailers are going to be facing an incredible time crunch. It will be critical to understand your daily processing capacity and transit time from your facility to the customer, which will play a significant role in determining the proper level of delivery service and ultimately your freight costs. For example, if your distribution facility is located on the east coast, you may need to leverage an expedited delivery method like three-day or two-day service for west coast orders. With ground service of four-five business days, you must have a clear plan in terms of how you manage outbound orders, processing those with the longest transit time first, or risk spending much more on freight than you may have budgeted. With freight being such a large expense, most retailers cannot afford to underestimate the impact of free shipping day on their holiday freight costs.
Effective forecasting models will identify expected order volumes on a daily basis. This allows you to schedule staff and ensure you have enough resources to meet demand. It may seem trivial, but running out of critical supplies like tape, scanners, carts, tows and anything else you need at each pack station can slow down processes and create bottlenecks that retailers may never recover from.
Increase Pick & Pack Station Efficiency
Warehouse pick and pack stations can’t automatically scale to accommodate huge spikes in order volume over the holidays. You must proactively find ways to improve efficiencies and increase capacity.
Adding another layer of complexity, demand for premium packaging, gift wrap and personalized messages spikes significantly in November and December. Since it would destroy your brand credibility to miss a delivery date (especially Christmas!), it’s crucial to lay the foundation so your warehouse can keep up with the added complexity and processes associated with gift packaging. Separate orders based on the type of packaging and any premium services required. Boxes should go to one station, wrapping paper to another, and personalized messaging at its own station.
Aside from gift packaging, identify other opportunities to pack orders through an alternative process and develop an optimized workflow for pick and pack stations. Consider reorganizing pack stations, creating mini assembly lines or other strategies such as “quick-pick” lines that support orders for only best-selling items.
Any opportunity to batch and pack orders more effectively will help reduce pressure and reliance on traditional pack stations. This will help your warehouse take advantage of process efficiencies and sufficiently manage a high volume of orders.
Hire and Train New Employees
One of the most pressing holiday challenges is finding skilled workers for your warehouse. Since you need to recruit, train, schedule and manage workers as cost-effectively as possible, ramp up hiring well before the holidays so you’re not scrambling to find employees when November rolls around. When you’re ready to hire your seasonal staff, ask for recommendations from your current workforce. This will help you find qualified candidates faster.
At Dotcom Distribution, we’ve found an effective onboarding process simplifies training and prepares new staff to be successful when they are out on their own on the warehouse floor. Train new hires then pair them with experienced warehouse staff for a half day before assigning them to their independent workstations. By matching them up with experienced staff, your new hires can learn processes and best practices firsthand, and have someone to go to when they have questions.
It’s important to treat seasonal employees the same way as your long-term staff. Set benchmarks and provide recognition for outstanding performance. Warehouse monitoring and performance incentives ensure the warehouse runs smoothly throughout the season. If things go well, you may need to hire some of your seasonal staff after the holidays to accommodate an uptick in long-term sales.
The holidays are always a busy time for retailers, but as the marketplace becomes increasingly competitive, it’s critical for brands to differentiate themselves by providing premium packaging and fulfillment. While this can be challenging for warehouses and logistics, especially on peak days like free shipping day, it’s worth it to take extra actions to maximize efficiencies and ensure consumers are receiving an outstanding customer experience every step of the way.
Maria Haggerty is president and founder of Dotcom Distribution. She can be reached at email@example.com.