Christmas is a crucial, and normally very profitable, time for retailers. However, retailers need to be prepared for heightened customer demand during this busy period. Otherwise, thinly stretched resources and added pressure generated by tight timescales can threaten retailers’ abilities to meet customer expectations at this critical time of year. It is therefore vital that retailers work with their suppliers and partners to ensure they are mitigating any risks of over-promising and under-delivering in the run-up to Christmas.
There are several stages at which the end-to-end Christmas delivery chain can run into problems. Initially, customers risk being lulled into a false sense of security by expensive Christmas advertising campaigns that promise speedy delivery – sometimes even within 12 hours of purchase. However, ambitious promises like these can often lead to customers being disappointed.
Retailers need to be aware of these common pitfalls during the Christmas period, ranging from adverse weather conditions to a customer’s failure to read the ‘small print’ in the delivery details. In addition, customers often receive a multitude of emails and text messages with estimated delivery times, many of which are received within hours of each other and yet give conflicting information. Whilst setting specific time periods for delivery (ie ‘your parcel will arrive between 10 and 11am’) is becoming increasingly popular, this service is notoriously difficult for retailers to manage effectively.
Sharing the load
It is not only retailers who face the challenges of heavy demand during Christmas, but also the warehouses and carriers that must cope with increased volume and limited resources at this time of year. As such, careful planning is needed in order to ensure that enormous quantities of parcels are not simply ‘dumped’ on warehouses and carriers.
Retailers can help to avoid this situation by encouraging customers to use convenient collection points. For example, InPost, the specialist locker bank provider, recently announced that it has started installing 24/7 terminals outside Morrisons’ stores, which could introduce a diverse dynamic of combining traditional shopping with collecting goods ordered online.
In addition, many large retailers now offer in-store Click & Collect schemes, which can provide customers with another option for receiving their online purchases. Research from Econsultancy in August 2013 found that almost two-thirds of consumers bought products online and later collected them in-store at least once in the past year, with 45% using Click & Collect at Christmas. According to a survey by InfoGraphic, this number is expected to rise even further in 2014.
Disappointment for customers leads to detriment for retailers
Customer satisfaction is also in danger of being compromised by unsatisfactory deliveries. High volume and tight time restraints mean that couriers can find it increasingly difficult to find discrete, safe places in which to deposit deliveries if a customer isn’t home. Whilst some carriers will spend a few vital extra moments determining the most appropriate place, or locating a good neighbour, to leave the parcel, it’s apparent that other less discerning couriers are inclined to leave an e-commerce parcel in full view of the street. Consequently, this provides a rich environment for opportunistic thieves, or can lead to disgruntled customers who have to journey out of their way to collect their package from a depot that can be several miles away.
To avoid these hassles, retailers should consider the ‘spend more, send it safely’ approach where the customer gets a more tailored, reliable and secure service in exchange for an increased premium. Customers should be made aware that the cheapest delivery option isn’t always the best option for their needs and, during the busy Christmas period in particular, selecting the premium delivery option may suit them best in some cases.
Whilst the festive season can provide retailers with a spike in sales and a chance to grow the brand, businesses in this sector will still need to put measures in place to maximise these opportunities and provide customers with the best possible experience. Otherwise, they not only risk losing out on their short-terms sales goals, but also on their longer-term brand strategy.
The whole package
In order to achieve success in all these areas, retailers will need to make sure that they are communicating efficiently across the entire supply chain – both internally and externally – so that they can build relationships with their customers based on accurate reliable information.
Retailers should also endeavour to make accurate predictions for the festive season with their logistics partners, including corresponding service level agreements, and put in place appropriate measures to ensure resources and time constraints are managed effectively. Likewise, pre-empting any problems and establishing plans to mitigate risks will also help towards customer satisfaction and brand development, as well as maximising profits at the peak of the calendar year.
Whilst Christmas is an extremely busy period for home deliveries, with the correct planning and a trusted relationship with suppliers, it’s possible for Christmas to still be a business-as-usual period. In an increasingly competitive market, retailers need to deliver a top quality service – as well as the presents – in time for Christmas.
Paul Doble is director at DX