Insights

The Holiday Frenzy is Upon Us … Tips to Get Prepared

BY Tom Barone

After a 16% increase in e-commerce sales in 2014, another 14% increase is projected this year, in turn driving greater customer expectations.* Today’s shopper is more connected than ever before, which means they have more information and can turn to any number of retailers for the products they want. The bottom line is if they don’t have the experience they desire, they will go elsewhere, especially during the holiday shopping frenzy.

Here are five tips – from fulfillment with its seasonal challenges for meeting volume and service levels, to preparing locations to handle ship-from-store, and beyond – to ensure your customers have the experience that keeps them buying from you instead of another brand.

1. Forecast early and often
One of the most critical factors for holiday planning is forecasting. It’s an extreme disappointment to a customer when products are unavailable or backordered. In fact, according to a survey by the CFI Group, 79% of consumers reported that rather than waiting, they are likely to switch brands when the items they are shopping for are not available. Not only does forecasting ensure product availability, but it also enables your fulfillment partner to fill and deliver orders as promised.

To create accurate forecasts, you need to take into consideration several factors, like your performance year-to-date compared to goals. Are you on track or behind? Will you run promotions and when? Is there a new product that is likely to have higher volume? The bottom line is that you need to create your forecast early and share it with your supply chain, stores and fulfillment partner. Getting the customer to purchase is great, but without the product or the capacity to meet fulfillment requirements, it’s all for not.

Forecasting should not be one and done. You need to continue to evaluate and fine tune throughout the season because they can change. And if so, you need to be ready and so do your fulfillment centers and stores. With accurate forecasting and frequent updating, you keep the sale, keep the customer, and ensure a great experience.

2. Get your fulfillment operations ready
Whether you have a third-party partner or do it in-house, you need to be certain fulfillment teams are prepared. Product quantities need to be on hand to fulfill orders, and you need to be sure that you have the appropriate capacity and staff to pick, pack and ship those orders in the fastest, most efficient way possible. For example, if you’re doing a promotion on a particular product, it’s important to let your fulfillment centers know so they can move that product to an easy pick location to handle the higher volumes more efficiently.

Beyond the fulfillment piece, retailers need to manage the shipping and delivery time expectations promised to customers. You need to ensure carriers can meet the volume and have the capability to handle demand spikes, not to mention weather issues. Are there plans in place to mitigate risk and deal with delays if they do happen? Another new factor this year is that carriers are getting more conservative and very focused on forecasted package volumes. Even to the point of saying they may not commit to on-time delivery of package over forecasted volume.

3. Ensure stores are equipped to handle ship-from store and in-store pickup orders
Let’s not forget about your stores. If you are shipping from store or offering in-store pickup – which you should because customers have come to expect those options – you need to ensure your stores are operationally prepared. Evaluate your staffing requirements based on increased thresholds for both ship-from store and in-store pickup orders.

Store operations need to design a process for these store-fulfillment orders that doesn’t disrupt the experience for customers shopping in-store. Some questions to consider include: Do you need to train staff? Do you need to increase the number of store associates to pick and pack ship-from store orders? Are their special packing requirements and do you have materials for holiday shipments? Will you offer incentives? There are a lot of factors to consider with store fulfillment so be sure your stores understand the requirements, process and expectations to successfully deliver.

4. Prep your customer service for the good and the bad
Along with the increase in shopping comes the increase in service requests from every channel: phone, chat, email and social. Customers want additional details about products, they have questions about shipping, they want to know where their orders are, and the list goes on.

The key is to be sure that you scale your customer service operations just like you do your fulfillment centers for increased volumes. Service agents, regardless of the channel in which they interact, are many times the only live interaction the customer has with your brand. You need to continually communicate letting service centers and associate know when promotions will run and what they entail. Especially let your service centers know when a promotion or the timing of a promotion changes so they’re prepared. It’s critical to provide updates on new products, pricing and policies that are in place for the holiday season.

Also, make sure your service centers are aware of out of stock or back-ordered products, shipping delays, and any other events that could impact the customer experience. While not all service interactions are negative, it’s important to train service associates to deal with negative situations and how to turn them into a positive interaction.

5. Perfect Your Payments and Fraud Processes
It’s inevitable. A percentage of orders will be flagged for fraud, which will likely increase during the holidays. In fact, losses increased by 33% last year, with merchants paying $3.08 for each dollar of fraud.**

There are ways to ensure your legitimate customers don’t pay the price with a poor experience. Do your research, know what your fraud rate is, and assess how the impacts. While actual fraudulent activity is costly, being over-sensitive with your fraud criteria can be even more expensive. Not only is the revenue from legitimate orders lost, but you’ll likely lose that customer. That’s not to mention the cost of the labor, time and resources expended on manually reviewing false positives.

Evaluate your manual review rate from last year to see if it is at least on par with the industry standard. Work with your risk management team to fine tune your rules to reduce manual review. Evaluate the data you are using and see if you have a single view of your customer. Are you linking all of the data you have – customer loyalty with transactional data, social and digital behavior, demographics, and more? Customer loyalty is a rarity today, so it’s vital that your risk management system is fine tuned to convert as many transactions as possible.

There’s a lot to keep track of during the holiday frenzy, but you can ensure your work pays off. Keeping these things in mind will help you continue to deliver great customer experiences and lead to a better 2016.

* Source: eMarketer. “Holiday Shopping Preview.” Mar 2015
** Source: LexisNexis: True Cost of Fraud Study 2015


Tom Barone is VP of eBay Enterprise North America Operations, where he is responsible for leading fulfillment and transportation, customer service, and omnichannel solutions across the business. eBay Enterprise is global provider of retail-optimized commerce solutions, including fulfillment, freight, store-fulfillment, retail order management, customer service, and payments, tax and fraud. For more information, to to eBayenterprise.com and Magento.com.

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OPERATIONS

Meijer treads lightly with Skechers expansion

BY Mike Troy

Six months after opening a Skechers concept shop, Meijer is taking the next step in what appears to be a more ambitious rollout of the branded shop to additional footwear departments.

The approximately 800-sq.-ft. Skechers concept shop feature 200 styles and was introduced at Meijer store in the company’s hometown of Grand Rapids, Michigan, earlier this year. Now the concept is being expanded to four additional stores in Midland, Michigan, Greenwood, Indiana, Marysville, Ohio and Grafton, Wisconsin. Meijer operates a total of 222 stores and said dozens more of the concept shops are on the horizon.

A key element of the Skechers branded shops are four video screens used to present product information, lifestyle news and celebrity endorsements of Skechers shoes.

“Skechers remains a very popular national shoe brand for our customers, who are looking for style and fit at an affordable price,” said Glen Reinart, divisional merchandise manager of shoes, jewelry and accessories for Meijer. “Their designs and technology are kept fresh and appeal to all ages. These concept shops are a perfect way for our customers to easily find the Skechers style and fit that matches their lifestyle.”

Skechers, based in Manhattan Beach, California, is a global brand found in more than 120 countries. The company also operates its own network of more than 1,000 stores.

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REAL ESTATE

Ross Stores continues aggressive store growth

BY Dan Berthiaume

Ross Stores Inc. is continuing an aggressive growth strategy for both its Ross Dress for Less and DD’s Discount banners. The new store openings are part of the retailer’s 2015 expansion program, totaling approximately 90 new locations during the year.

Ross Dress for Less will open four new stores on Oct. 10. These include two new stores in the Chicago area: a 25,000-sq.-ft. store in Palatine located in the Deer Grove Centre, and a 24,000-sq.-ft. Joliet store is located in Joliet Commons.

Ross Dress for Less will also open a 22,000-sq.-ft. new store in Elkhart, Indiana, in the Shoppes on Six, and a 25,000-sq.-ft. store in East Largo, Florida, as part of the redevelopment of Tri-City Plaza.

DD’s Discounts will open four new stores on Sept. 26. These include a new 24,000-sq.-ft. store in Yuma, Arizona, in Catalina Center, and a 19,000-sq.-ft. store in the Florida International Plaza, in the University Park neighborhood of Miami.

DD’s Discounts will also open two new 22,000-sq.-ft. stores in Del Rio and North Garland, Texas. The Del Rio store is located in La Villita Shopping Center and the North Garland store is located in Buckingham Plaza.

Together, Ross Dress for Less and DD’s Discounts currently operate more than 1,400 off-price apparel and home fashion stores in 33 states, the District of Columbia and Guam.

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