Amazon Prime Day, which kicked off June 21, gave the shipping industry a bit of a preview of the upcoming holiday season. The big takeaway: Everyone needs to do their homework and prepare.
Supply chain disruptions — including global shortages of labor, shipping containers, air freight capacity, and materials like semiconductors and plastic — as well as restrictions due to COVID-19 outbreaks in China’s Guangdong Province greatly limited the ability of many companies to participate in this year’s Amazon sale.
The immense consumer demand we’ve seen over the pandemic remains sky-high despite the many roadblocks the global supply chain is facing. Combined with the spread of coronavirus variants and slow inoculation rates worldwide, the state of the industry during the 2021 holiday season feels like a big unknown.
But while the pandemic created many new challenges, it also taught us to prepare for anything. So with this year’s holiday season right around the corner — picking up in time for the back-to-school rush, which begins Aug. 1. — there’s no time like the present to begin laying the groundwork.
Here’s how to prepare for the upcoming holiday season.
Plan for shortages that may affect you.
It’s safe to say we’ll continue to see more demand, less capacity, and higher prices. In fact, our already-strained global supply chains may stay that way into 2022, according to Dan Maffei, chairman of the Federal Maritime Commission.
Ramp up production now and book in advance to accommodate ocean freight transit times. And stay flexible, as we may see higher costs around sourcing and transportation of goods.
The retail inventory-to-sales ratio is at a record low, so retailers should build up their inventories by October to be prepared for peak holiday shopping, suggests Jason Miller, associate professor of supply chain management at Michigan State University.
Know the deadlines.
There may be many unknowns in the industry right now, but one reliable factor is peak shipping season. Historically, this is August to October because of back-to-school and holiday shopping, although market conditions can prolong the season.
Delivery timing can make or break your revenue goals, so prepare in advance. Communicate delivery dates with your logistics provider now, then work backward to consider delivery windows, appointment processes, and transit times.
Stay up on consumer trends.
We predicted e-commerce would continue to grow — and it has. Because of quarantine and health guidelines, the industry has seen increased purchasing of goods over services during the pandemic. We predict more of the same during the 2021 holiday season.
You can preemptively fortify your processes by improving your online presence, product availability, fulfillment efficiency, and value for price.
Despite supply chain hurdles, consumers still expect same- and next-day shipping, along with options for click and collect and/or last-mile tracking. A dedicated 3PL provider can help with omnichannel fulfillment to help manage the holiday surge: Offer choices like BOPAC (buy online, pick up curbside) and BOPIS (buy online, pick up in store), or consider shipping from a local store to the customer’s door to increase shorter and cheaper order cycles.
Review previous performance.
Hitting unforeseen obstacles is always a possibility, but as we roll into the 2021 holiday season, reflect on 2020 to seek company performance improvements. How did your website perform? Did customer service aptly handle returns and concerns? What were your core issues?
Communicate with your logistics partner.
To prevent delays and overcome hurdles, utilize a logistics provider and maintain a close dialogue. Container imports are still at peak volumes, so prepare for a surcharge when calculating holiday shipping costs, and look into early shipping. 3PL providers can help you stay agile with inventory and suggest transportation methods right for you, such as multimodal service, which may help you avoid high rates.
Conclusion
Preparing for holiday shipping doesn’t have to mean a costly investment in technology and infrastructure. Partnering with a 3PL like GlobeCon can help you scale over time to meet demand and have access to expert help when and how you need it.
Let us help you navigate the complexities of transportation. Contact us today.