The AERO Fulfillment Blog

Planning and Managing Peak Returns Season

Overall, holiday’s sales this year appear to have been robust, with Mastercard reporting total retail sales were up 3.4% year-over-year for the period of November 1^st to December 24^th. Online sales represented 15% of the total, with total e-commerce sales up 19% over last year.

And now a new year is upon us and the flood of holiday returns has begun, with UPS estimating that 1.9 million return packages entered the UPS network on National Returns Day (January 2^nd ). That figure represents a 26% growth in returns over 2018. The increase highlights the continual rise of e-commerce and the resulting surge in returns via delivery services.

So, with holiday sales booked and your attention now firmly set on managing peak returns season, let’s take a moment to identify areas you can audit this year to prepare for next year’s peak returns season.

Any company with a D2C ecommerce model is well aware of the increasing challenges of managing fulfillment, in particular, freight costs during the fourth quarter. Consumer shipping expectations continue to rise driven by the fulfillment benchmark being set by Amazon, Walmart, and other large D2C companies. Consumers are being trained to expect shorter shipping times with low, or no, shipping costs. Further increasing the complexity of managing fourth quarter fulfillment is the increasingly compressed online holiday shopping season driven by the expectation of 1 to 2-day shipping. In this article the focus will be on strategies to manage fourth quarter freight costs during this critical period while meeting your customer’s high expectations. In particular, we will focus on the key drivers impacting your shipping costs which includes, staffing, packaging, dunnage, freight negations, and communication.

It is easy to get spooked this time of year. The weeks leading up to peak season can be scary, but peak will be even scarier if you don’t have the right partner. The holiday season is almost upon us and customers are ready and will test the mettle of your supply chain. It’s time to iron out any holiday shipping and logistics frustrations and avoid unpleasant surprises of what is likely your busiest time as a business. Your vendor and, subsequently, your vendor management practices are your first line of defense against the three great customer reputation killers. Here's why solid, consistently performing vendors are worth their weight in GPS-tracked gold.

With one of the tightest labor markets on record it’s not surprising that many HR departments are struggling in the areas of hiring and retention. And while hiring and retention have always been a challenge, the impact of eCommerce is raising the stakes to a whole new level – if your company has adopted a direct to consumer (D2C) eCommerce channel – the time window for fulfilling the majority of your orders during peak season has shrunk, in many cases, from months to weeks.

In this article we’ll be focusing on a few key areas of a successful hiring and retention strategy, with specific attention to eCommerce fulfillment during peak season(s). While all these strategies have merit, it can be helpful to review these ideas based on their ability to support and improve your own company culture.

Today let’s start off with what may be an uncomfortable question. How flexible is your long-term eCommerce strategy? In other words, have you created a system that is designed to adapt easily to an online multichannel marketplace where change is relentless, and the future can be unforgiving to those that fail to adjust quickly and efficiently? If you’re not sure, now is the time to take a quick inventory of areas to keep on your radar as you move forward, in addition, we’ll provide an opportunity for you to explore these subjects in greater detail.

With a current market size of $514 billion and an anticipated CAGR of 7.8 percent, U.S. eCommerce revenues are anticipated to exceed $740 billion by 2023. Given the size and growth of eCommerce, it’s no longer a question of whether your company will be selling products online. Instead, given how vital eCommerce is becoming to your company’s success, how will you manage your eCommerce business today and in the future? Specifically, how will you create a fulfillment system that minimizes your costs, meets your customer’s expectations, and easily scales to meet the needs of your growing eCommerce business?

Even companies with large warehouse operations need to take a close look at their current fulfillment model -- designed to manage and move products in bulk – and ask themselves if they have the warehouse space, technology, and labor to create an efficient, cost-effective eCommerce fulfillment solution that stores, picks, consolidates, and ships smaller, more frequent orders, quickly and accurately?

The measure of success for a warehouse is typically determined by results: the units of product successfully and efficiently received, processed and shipped, minimal inventory damages, no injury incidents. If target numbers for categories like these are achieved, warehousing strategies might not venture beyond maintaining the status quo — the adage of "don't fix what isn't broken" at work. What fulfillment center managers often fail to realize, however, is that assessing and improving warehousing layout can move a business from treading water to real change, the lasting kind that bolsters the all-important bottom line.

Is your warehouse working as hard for you as it should be?

Efficiency isn’t just a business buzzword.Efficient production means making products without wasting materials, natural resources or man hours. Efficient facility management means running your business while reducing your energy costs and minimizing its carbon footprint. Efficient advertising means targeted ad campaigns that make the very most of your marketing dollars.

Moving your product from point A to point B is rarely a A-to-B process. As customers happily dive into their shipments, little thought goes to the intricate network behind the scenes that made it happen, but those same shipping solutions are likely a major concern for you. One of the most challenging aspects of shipment is the dual selection of mode and carrier. While it's tempting to lean on a basic freight quote to keep things moving along, you'd be doing yourself a disservice. Basic freight quotes are full of holes, and may not be meeting your fulfillment center's needs in a meaningful, consistent way.

There are three things you need to consider that are often missed.

Even if your fulfillment center doesn't have Santa's workload to contend with, they'll still have to work a little peak season magic to keep the peak influx of orders. Often customers are unavailable and gift-giving timelines are non-negotiable, your supply chain needs to be backed by a strategy that holds up to scrutiny and stress to remain viable. As with most supply chain planning, it's in your best interests to be proactive, not reactive, so here are a few last to-do list items to cross off before ecommerce marches into the busiest weeks of the year

It’s no secret that managing warehousing expenses has always been tricky for COOs and supply chain managers. What happens when your warehouse is reaching capacity? Do you build, relocate or outsource your fulfillment needs?

Space doesn't come cheap and can't easily be expanded in small increments. When a company decides to build new warehouse, it typically must build more than it presently needs. In the near-term, much of the new capacity will probably sit empty. On the other hand, space limitations will cap your company's potential revenue or potentially create safety issues for your associates. In both instances, something must change.

How do you strike a balance between current warehousing needs, anticipated future warehousing needs and justifying the projected budget? If you’re looking to expand, follow these steps to determine if it’s time to outsource your fulfillment needs.

As the weather shifts into cooler temperatures, you can almost hear the stampede of holiday customers waiting to test the mettle of your supply chain. Your e-commerce vendors—and, subsequently, your vendor management practices—are your first line of defense against the three great customer reputation-killers as the holidays loom. Improve your fulfillment efficiency by ironing out wrinkles and close loopholes to avoid unpleasant surprises in the middle of what is likely one of your busiest periods. Maintain your reputation with customers by avoiding these three missteps.

With e-commerce fulfillment centers facing down a proverbial tide of year-end business, productivity and efficiency soar to the top of managers' wish lists. How do you fulfill your e-commerce orders and give these must-have gifts to your managers? Here are five ways to prepare for the winter storm of orders without breaking a sweat or investing in expensive new warehouse technology:

A goal-oriented supply chain is a focused series of connected modules - raw materials to components, components to manufacturing and so on. When the initial approach amounts to what is essentially a collection of moving parts, it seems reasonable to apply solutions the same way: piecemeal. However well this may work for each individual module, that success is at the cost of a greater supply chain strategy - one that embraces a top-down approach and encourages that all-important trait of transparency. Considering today's increased demand for transparency from both the consumer side and that of your trading partners, it's not a facet your company can afford to let slip. 

The holiday season is almost upon us and customers are waiting to test the mettle of your supply chain. It’s time to iron out any holiday shipping frustrations now to avoid unpleasant surprises of what is likely your busiest time as a business. Your vendors—and, subsequently, your vendor management practices—are your first line of defense against the three great customer reputation-killers. Here's why solid, consistently performing vendors are worth their weight in GPS-tracked gold.

Four Areas to Evaluate for the Best Supply Chain KPIs

It can be tempting to set a static goal and measure daily progress against it; however, in a climate that can change direction in a moment, your business practices can become outdated quickly. Warehouse key performance indicators (KPIs) are the best tools to guide actionable measures in afulfillment center. KPIs reflect the state of your efficiency on multiple levels.

Do you have the best supply chain KPIs for the job? The following four areas will help you start.

There may be times customer orders pick up throughout the year; however, in general, the fourth quarter is most demanding for a warehouse distribution facility. If you weren’t 100% satisfied with how last year’s peak season went, now is the time to examine your options to ensure you are providing the best solution to keep happy, repeat customers.

Before summer is in full swing, it’s time to figure out what part of your order experience didn’t function well last year and seek to find strategic improvements that are best for your business.

Peak season is a huge challenge for companies like yours, whether you manage it inhouse or have a 3PL that provides your order fulfillment. Effectively meeting the need throughout the year regardless of volume is something not every provider can do well.

Many business experts say that you should treat such a function as a type of customer service. Do it well, it can have a huge boost for relationship building and growing your brand. Do it poorly, and it doesn’t matter how great your product may be— customers are going to remember that experience when they think of your brand .g dock and then, eventually, to the customer's doorstep, packaging fulfillment is often one of the most overlooked and thereby dysfunctional parts of a business. 

Despite the fact that your fulfillment team has a direct impact on consumer buying behavior and building brand loyalty, it’s likely you’re less concerned about developing a coherent supply chain strategy than you are about creating your next marketing campaign— even if you are pouring a considerable amount of money into operations.

Businesses which fall into the trap of putting too much focus on manufacturing and inventory costs are being held back from their full potential as they fail to acknowledge the inefficiencies arising through weak links in the supply chain.

No matter what industry you are in, one thing is clear: your supply chain is essential to your success.