TAGG shares proven strategies for meeting 3PL fulfillment volume peaks in 2022.
TAGG’s ecommerce order fulfillment centers set 2021 records as the leading 3PL fulfillment partner kept pace with the holiday surge. Despite the pandemic, rising prices and product shortages caused by supply chain issues, holiday sales in 2021 increased 8.5 percent—the fastest pace in 17 years, according to Mastercard SpendingPulse.[1]
Despite a lackluster Cyber Monday, ecommerce sales increased 11 percent year over year, accounting for just over 20 percent of holiday sales overall.[2] While in-store shopping increased significantly from 2020 to 2021 as well, a growing alternative has been to buy online and pick up in the store (BOPIS). In a recent survey, nearly two-thirds of American consumers choose this option—an increase of nearly 23 percent in just six months.[3]
The U.S. Postal Service and UPS delivered 99 percent of packages on time between November 14 and December 11. FedEx® delivered 97 percent on time. Part of the reason is that consumers were motivated to shop early; for example, Amazon, Target and other retailers advertised holiday deals as early as October.[4]
Increases in TAGG shipping volume mirrored the broader market surge. In 2021, TAGG shipping soared during peak week (November 29) with an increase of 88.8 percent. This was dramatically higher than 2020’s 56.4 percent rise during peak week.
During peak week, network average days to ship (DTS) was 1.78. Without TAGG’s nationwide order fulfillment center network, autonomous picking and robotics, and the TAGG Peak Prep program, DTS could have been 20 to 30 percent longer.
The key behind higher 3PL fulfillment partner performance
How was TAGG able to handle such a surge in volume while still maintaining high service levels and speed-of-now delivery? For starters, TAGG can leverage a broad network of strategic ecommerce order fulfillment centers across the US, including:
- Greenville, SC Order Fulfillment Center
- Allentown, PA Order Fulfillment Center
- Chicago, IL Order Fulfillment Center
- Cincinnati, OH Fulfillment Center
- Dallas, TX Order Fulfillment Center
With that level of scale across the country, TAGG can balance labor nationwide to meet varying levels of shipping demand from location to location. As a result, TAGG doesn’t need to rely on local, seasonal workers to keep shipments moving. In addition, TAGG can route each order to the ecommerce order fulfillment center in its network that is most capable of ensuring on-time delivery, without impacting shipping costs.
“This is our Peak Prep strategy in action,” said Tod Yazdi, chief executive officer of TAGG Logistics. TAGG Peak Prep is a volume forecasting and resource allocation strategy that helps keep shipments moving on time during the holiday surge. Collaborating closely with clients, TAGG develops forecasting models based on the estimated increase in holiday sales volume. These models leverage robust ecommerce order fulfillment data gleaned by a proprietary set of TAGG business intelligence tools.
The analysis includes historical peak volume by TAGG ecommerce order fulfillment center, individual TAGG client and shipping services. Then, TAGG discusses the analysis with clients to make any adjustments in sales strategy and inventory allocation prior to the holiday surge.
“Just as important, TAGG business intelligence tools are available to our clients year ‘round,” Yazdi said. “Any time of day or night, 24/7/365, our clients can log in to TAGG Voyager. This online portal gives clients instant access and insights into 3PL fulfillment data, including shipping information, inventory levels and much more.”
With TAGG Voyager, clients can better manage shipping volume and inventory levels throughout TAGG’s nationwide ecommerce order fulfillment network. “If order demand is spiking more in one location than another, our business intelligence tools can calculate where to move inventory and adjust in-stock product levels to meet demand,” Yazdi said.
TAGG Voyager also monitors other key metrics such as order profile, which tracks lines per order. Order profiles can change when a retailer runs a sales promotion that may bundle items or offer “buy one, get one free” or at a reduced price (BOGO). This metric is important because effects in the order profile—for example, increasing from 1.5 to 2.5 units per order—can add significant picking time.
“TAGG Peak Prep, combined with clients proactively monitoring their ecommerce order fulfillment data via TAGG Voyager, can help us better collaborate and plan ahead for volume spikes,” Yazdi said. “That’s what you’d expect your 3PL fulfillment partner to do. And we’re dedicated to being that partner as we help you take Your Business EverywhereSM.
Contact us today to learn why TAGG is best qualified to be your 3PL fulfillment partner.
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[1]Latimes.com. “Holiday sales rise 8.5% despite supply-chain issues and Omicron variant.” December 27, 2021.
[2]CNN.com. “Inflation be damned: Here’s why Americans spent a ton for the holidays.” December 27, 2021.
[3]Retailwire.com. “Is the BOPIS experience getting any better?” December 13, 2021.
[4]Nytimes.com. “Why Christmas Gifts Are Arriving on Time This Year.” December 22, 2021.
