There’s power in early planning and lessons to be learnt from every season in retail. In this piece Mel Tymm, industry principal at Naveo Commerce, looks at what 2021 can teach us about 2022 peak season and why product visibility and smart warehouse solutions are key.
UK consumer spending reached over £25 billion during last year’s Christmas season, which meant there was huge pressure on both the supply chain and retailers alike. Grocers like Sainsburys had to reassure worried buyers that there would be enough stock available, while supply chains sought to avoid a repeat of 2020, when four in ten customers reported items being damaged or lost by couriers before Christmas.
As a result, retailers had to implement detailed peak planning to offer their customers a frictionless and efficient shopping experience, from Black Friday through to the January sales. So what did retailers learn from last year, and how can these insights help them prepare for this years’ peak season?
The story so far
The world of ecommerce grew exponentially in response to the pandemic. An increase in the volume of orders and returns, potential labour shortages and the aftermath of Brexit meant that order fulfilment was more of a challenge in 2021 than in previous peak seasons.
All of these factors contributed to a relatively disappointing Black Friday, with year-on-year growth down 14.3%. What’s more, UPS predicted that one fifth of its packages would end up on the shipping room floor, with no capacity to deliver them. This meant that approximately 20% of deliveries would not make it to customers on time.
The majority of 2021’s peak season was also overshadowed by a new Covid-19 variant, Omicron, that was rapidly spreading across countries. The challenges this created highlighted that retailers should always expect the unexpected and be prepared to adapt where necessary.
Adapt and optimise
In response to all the challenges across recent peak seasons, there has now been a shift away from the weekend-long ‘Black Friday’ event, towards an extended, month-long period that leads into the Christmas rush. This gives retailers the opportunity to capitalise on early interest from consumers, using email marketing and social media channels to capture consumers attention and drive engagement.
Social commerce – like in app purchases through Instagram or Snapchat – is building momentum. This is because engaging with customers and selling via these platforms allows consumers better access to the products they are interested in.
Utilising this multi-channel, early-engagement model, allows retailers to spread deals out over various product lines, and in turn, better manage the influx of orders to fulfil what they have promised. And UK retailers are taking a different approach in comparison to their US counterparts, being more selective and strategic about which products go on sale, moving away from trying to maximise revenue in just one day.
Adopting omni-channel strategies is another way retailers are combatting peak season demand. By combining all operations and platforms, from online orders to in-store purchasing and click-and-collect, retailers can help to ease the strain on delivery operations.
For this to work, full insight into stock levels and locations is key. Therefore, technology solutions and integrated Order Management Systems (OMS) that allow real-time visibility into products, purchases, orders and returns are becoming invaluable to retailers looking to streamline operations.
And finally, implementing robotics and smart warehousing solutions to support the picking and packing processes has proven to speed up delivery, reduce the reliance on labour and further optimise an omni-channel strategy.
The 2022 season presents significant opportunities for retailers. The retailers who can successfully implement the key learnings from 2021, integrate new technology into their current systems and prioritise customer satisfaction, will be the ones who see huge ROI from this period.
Written by Mel Tymm, Industry Principal, Naveo Commerce