The holiday shopping season is already underway, as demonstrated by Amazon running an October version of its Prime Day sales event and many retailers rushing to lock in sales as early as possible. The reasons for the early start are a powerful mix of inflation fears, high inventory levels, staffing issues, and reduced store opening hours, and a desire by retailers to spread holiday shopping out over a couple of months instead of a couple of weeks.
With the holiday season already in full swing, clearly this means the deadline for implementing new applications has come and gone; however, that doesn’t mean you can’t take steps right now to fine-tune your omni-holiday strategy.
Aptos clients in North America saw a 75% increase in sales volume fulfilled from their stores during the 2021 holiday season. Based on YTD ’22 omni-sales, we continue to be bullish on the role stores will play in fulfilling e-commerce sales volume for holiday 2022.
Our advice for this peak period is to focus on the basics of good store management. Typically, retailers have prepared a store sales plan for the front of the house, but have you also forecasted the store’s omni-fulfillment plan? And has your plan taken into account this year’s longer, flattened holiday selling curve?
Together, the preceding two steps form the foundation of your store’s holiday omnichannel sales plan. Some key considerations to think through are:
If you don’t know the answers to these questions, then use your store sales plan as a base and set an omnichannel sales penetration goal to flesh your plan out. Better yet, take a look at your omni-sales numbers from last year if you’ve got a record of omni-sales history.
As always, it’s important to keep in mind that click-and-collect orders will triple during the two weeks before Christmas when the distribution center can no longer guarantee on-time delivery, so plan accordingly.
Every customer experience — and customer order — counts. Retailers can’t afford to disappoint shoppers by not having adequate staff to accommodate both the influx of omnichannel orders and the needs of walk-in customers.
When staffing for the holiday season, retailers should plan their store labor needs separately for both omnichannel store fulfillment and walk-in customer service. Each of these staffing plans has to tie into your store and omni-sales plans.
The rationale to plan labor separately is that if you short-staff floor labor for walk-in customers, then the staff assigned to fill ship-from-store and click-and-collect orders will be expected to fill the gap.
Walk-in customers won’t know (or care) that an associate they’ve approached is actually assigned to be a picker to fulfill online orders. Shoppers just want assistance.
To avoid this situation, as part of an omnichannel sales plan, staff stores so that designated employees can pick all e-commerce orders in a timely fashion. The picking should be done as soon as the order comes in to reduce the chance of items being out of stock. What we recommend is to schedule an omni-picking team before the store opens so orders from the prior evening can be pulled from the store before the first customer walks through your doors.
Equally important, ensure there’s enough frontline staff to handle walk-in customers, as there’s nothing more frustrating for a holiday shopper than to be on a gift-finding mission and unable to locate the associates necessary to support their buying journey.
When defining your omnichannel sales plan for the 2022 holidays, it’s critical that the order management system (OMS) is aligned with your plan.
Have you increased store capacity for orders by day to match your sales and labor plan? You simply can’t do 100 orders a day in a store if your store capacity limit is still set at 10 orders per day in the OMS. Unfortunately, we see retailers that have not put in a maximum order volume by store and are surprised when a store has 200 orders show up when they don’t have the staff to fulfill them in a timely manner. We recommend you put an order throttle in for stores even if it is only for the holiday season.
Have you updated your store closing times in the OMS so the system knows that you can still handle orders much later in the evening during the holidays compared to other times throughout the year?
Do you have some stores that can offer gift wrapping? Is your OMS configured to account for these special services?
When it comes to your OMS and the holidays, “set it and forget it” is not the right approach. Retailers should review their OMS configurations on a weekly basis to ensure the dials are set correctly for the week ahead.
For some retailers, in the run-up to Christmas, it might even make sense to plan OMS settings on a daily basis. Most OMS solutions allow you make rule adjustments in real time.
A growing trend that we are seeing is more online returns being processed through stores. As more retailers add restocking fees for online returns that are mailed back to a warehouse, the trend is for stores to become the return location of choice for many customers.
Given the alarmingly high percentage of online orders that are returned, an influx of returns can easily overwhelm a store. It is important for retailers to take a hard look at their store e-commerce return processes during the holiday season and make adjustments as needed — and the sooner it is done, the better.
The holiday season is the time of year that will pressure test your strategy, systems, and processes and help you determine the long-term adjustments needed for omnichannel success.
If your organization is looking for assistance in defining your omnichannel strategy and goals and building your omnichannel business case, get in touch with me.
I’m always happy to share best practices and pitfalls to avoid as you forge ahead to improve omnichannel profitability.