As Black Friday moves online, ecommerce order fulfillment partners become more important.
Ecommerce order fulfillment is officially a fixture of Black Friday. Mastercard is reporting that this year’s online sales during Black Friday grew 10.6% year-over-year—and that is on top of last year’s 85% surge. Retailers, e-tailers, and their fulfillment partners are sure to have their work cut out for them in the coming weeks—and Black Fridays to come, as the day after Thanksgiving continues to be an offline and online shopping feast.
In-store is back—but ecommerce order fulfillment is now the cornerstone of Black Friday tradition.
With the economy opening up and people’s pent-up desire to get out, in-store sales jumped 40% compared to the same time in 2020, according to Mastercard. Also driving the mass migration was people’s desire to get ahead of shortages and shipping delays by getting their purchases in person.
That said, ecommerce isn’t going away —in fact, Adobe expects U.S. e-commerce spending this year to total between $850 billion and $930 billion, and to top $1 trillion in 2022. It’s clear that Black Friday will continue to be observed online as well as in store. By the looks of things, it may even eventually be absorbed into cyber week, stretching from the Tuesday before Thanksgiving until Cyber Monday.
Inventory shortages and stock-outs loom
Stock-outs are a risk. Just two weeks ago there were still 86 container ships awaiting berth off the coast of Southern California. A sign of what’s to come is out-of-stock messages on ecommerce sites—they’re up 124% in November, according to Adobe.
Avoiding post-sale stock-outs is an essential practice for retailers. Real-time inventory management that provides visibility into stock stored in every distribution center you or your fulfillment partner manage, enables you to make the sale. Immediate purchase of the item in the store prevents disappointed customers—and potential damage to your brand.
To help clients mitigate uncertainty across their supply chain and have a strong holiday season, the team at TAGG Logistics developed TAGG Peak Prep, a volume forecasting and resource allocation strategy to help clients keep orders flowing in a timely manner during peak holiday season. Visibility is a key consideration of TAGG Peak Prep. Customers want to be in the loop, even with the bad news for out-of-stock items. TAGG enables customers to update their processing time and days-in-transit shipping information at checkout, to better inform their customers.
Delivery delays and surcharges are front and center
Last year, many shippers and consumers were caught off guard by delivery delays and surcharges from small parcel carriers. This year, carriers FedEx, UPS and the USPS published their holiday shipping deadlines and peak season surcharges well in advance of the holidays.
With the capacity crunch caused by driver and equipment shortages as well as the peak season surge, surcharges and high shipping rates will continue to challenge retailers dealing with customers’ expectations for free shipping. Delivery is a make-or-break element of online customers’ experience and a critical determinant of your bottom line. That’s why TAGG Peak Prep prioritizes keeping retail clients up-to-date on parcel surcharge rates, so they can adjust their budget expectations.
A peak without a peak is hard to plan for
Well-publicized supply chain bottlenecks caused by container ships gridlocked off the coast of California and driver and equipment shortages influenced consumer behavior this year. Fear of not being able to get the season’s most popular gadgets, coveted toys or hot t-shirts has sped up buying behavior. 61% percent of shoppers say they already started shopping at the start of November. 46% said they started earlier this year. And 28% of people even said they completed their shopping by early November, according to the National Retail Federation.
Staffing for a nontraditional peak during a labor shortage is a challenge. TAGG Peak Prep provides customers with forecasting models to adjust resources, including staffing levels and ensure trucks and drivers are available to meet demand.
Omnichannel fulfillment: uber important in 2021
Black Friday saw shoppers return to the stores, but it wasn’t necessarily a human connection they sought. It was faster, cheaper connection to purchases before they sold out. This year, curbside pickup has increased 70% from 2019, Adweek says.
Buy online, pickup in store (BOPIS) was an important tactic for retailers — with the foresight and strategy to fulfill on it — this holiday season.
BOPIS highlights the necessity for an omnichannel fulfillment strategy that can handle complex sales channels. Customers wish to connect with coveted products, and the retailers who sell them, in many different ways, including through your website, digital marketplaces, digital channels, non-digital channels, retail storefront—and curbside. Implementing omnichannel fulfillment comes with a learning curve and requires a network of ecommerce order fulfillment centers that can take time to establish.
Working with an established omnichannel fulfillment partner can enable a retailer to jump into a trending sales channel while it’s still a trend. Working with an omnichannel fulfillment network that has multiple order fulfillment locations nationwide means that no matter where consumers are, a retailer can have a local fulfillment center that can reach them fast.
Fastest-growing categories: apparel…and returns?
Mastercard reports that clothing was the big winner of Black Friday 2021, experiencing an increase in sales year over year of 86.4%. The great news comes with a caveat: returns in this category can be brutal on retailers. Many consumers habitually order multiple sizes online and return the items that don’t fit. Why not? Returns are usually free for consumers.
For retailers, however, it can be a costly endeavor. The NRF reported in a press release last January that 30-40% of clothing and shoes bought online get returned.
Returns and refunds not handled expeditiously are a sure means of customer dissatisfaction. 84% of consumers said the returns experience is an important determinant of their opinion of retailers in a survey conducted by Doodle. Returned merchandise not managed properly quickly become a loss that can’t be reentered into inventory or even resold at a discount. It’s because returns management requires labor and valuable warehouse space that many companies don’t have. As a result, it’s estimated that 25% of returns end up in a landfill.
An alternative to handling—or not handling—returns in-house is to hire a 3PL fulfillment provider that is also a reverse logistics provider. When a customer returns a purchase, the 3PL receives it at the distribution center, inspects it, initiates the refund and can immediately return it to inventory to be resold.
Ensuring success through peaks is a matter of having the ecommerce order fulfillment solutions to handle the challenges that come along—both precedented and unprecedented. Put the resources, people and strategies in place with TAGG as your fulfillment partner and through its holiday planning expertise, TAGG Peak Prep.Contact TAGG Today