When stockings and Christmas trees go up each year, so do the expectations and workload of e-commerce retailers. Customers may clamor to receive their products before the unspoken deadline of December 24, but third-party logistics providers inevitably experience overload from the increased volume. What's a retailer to do when their shipping solutions suddenly look a little less sure than they did a few months prior? The answer is to learn which shortfalls are most likely to be inevitable, and support weak points in the fulfillment process before profits start to spill out.
Work With Your Foreseeable 3PL Limitations
In an article for Fortune, Phil Wahba explored an unusual hard line stance taken by UPS last year: In light of the profit-wounding, employee double-up they implemented last Christmas season to prevent a repeat of 2013 shortfalls, UPS declared that in 2014 they would be increasing customer fees and perhaps even refusing packages if large retailers with a great deal of package volume waited until the last minute (e.g. December 23) to hand them over. While the company has undoubtedly taken advantage of research and innovation in the year since then, it's a reasonable bet they'll still be slammed with business in the second half of December. Gift shopping procrastination is a holiday tradition that's right up there with nine maids-a-milking, but that doesn't mean you can't make a stronger appeal to early bird customers to lighten the load on your 3PLs. Consider bumping up your holiday sales and promotions a week. From a marketing standpoint, you'll be strengthening the customer-facing proposition of taking care of shopping ahead of time to properly enjoy the holidays.
Pick the Right Shipping Options
During the time-sensitive holiday season, customers want firm dates and tracking for their items, the arrival of which often coincides with events and get-togethers. If your customers can look up their own tracking information - or better, view it auto-populated directly on your site - they're less likely to tie up your customer service inbox and phone lines with simple shipment questions. Consider scrapping or minimizing non-tracked shipping methods altogether from Black Friday on through until New Years'. This will create a homogenous shipment load for your in-house fulfillment team as well as your 3PL pickups and last mile delivery services. Also, you’ll likely want to try to retain as much internal control of your shipments as possible. Amazon UK experienced many of its late shipment complaints due to the failings of boutique and sub-contracted 3PL delivery services that failed to hit their time windows; once the company shifted to take more personal control over shipping solutions, satisfaction shot back up.
Overestimate Costs in Your Holiday Shipping Budget
Those companies caught flat-footed by the implementation of DIM pricing would do well to be mindful of that hard lesson through the holidays. Price hikes are coming, in one form or another. Whether it's a raise in base pricing or surcharges for, to borrow a term from Uber, "surge" timing, 3PL holiday surcharges wind up on your bottom line sooner or later. Factor your estimates a little higher than they normally would be, and you'll sidestep the pinch of unexpected operational costs. If you end up dodging the bullet altogether through smart promotional timing and shipping practices, that surplus can always be rolled into next year's operational budget.
The ideal shipping solutions for your company shouldn't need a sleigh and reindeer to pull off—just proper planning and a little of that old business adage: prepare for the worst while hoping for the best. Chances are that a hefty majority of your customers will predictably wait as long as possible, but you can lessen the impact of that procrastination by standing ready to steer them to the least-painful solutions for their needs—and yours.