At present, ecommerce sales are projected to reach approximately $6.9 trillion (with a “T”) in sales worldwide by the end of 2024. According to Forbes Advisor, that figure is expected to rise to $7.9 trillion by the end of 2027. Of course, while ecommerce sales are generally a constant throughout the year, seasonal demand is a massive driver for the bulk of those figures, especially for an ecommerce business. For the companies that can successfully manage it, that is.
Seasonal demand puts a considerable strain on even the most established logistics networks, as high-volume order fulfilment requires a considerable amount of careful planning, especially during peak seasons. In order to keep customers happy while also staying ahead of the competition, companies will need to learn the careful balancing act that comes during the onslaught of high order volumes during demand spikes. This article will explore seasonal demand, its challenges, as well as possible strategies for being successful when things get hectic.
Understanding Seasonal Demand And Market Risks
Seasonal demand refers to the fluctuations in customer demand for certain products or services during specific periods of the year. The pressure to meet elevated demand—while maintaining efficient delivery and fulfilment—can put even the most robust logistics networks to the test.
Understanding seasonal demand is crucial for businesses to optimize their inventory management, supply chain, and logistics to meet customer expectations. By anticipating sales volume fluctuations, businesses can avoid stockouts, overstocking, and other inventory-related issues that can negatively impact customer satisfaction.
During peak seasons, such as the holiday shopping period or back-to-school season, customer expectations are at an all-time high. Businesses that can accurately predict and prepare for these demand spikes are better positioned to fulfil customer orders promptly and efficiently. This not only enhances customer satisfaction but also helps in building brand loyalty and repeat business.
These periods of seasonal demand can shift, especially in the world of ecommerce. Thanks to Amazon’s popularity and the powerful draw of Prime Day, the 2024 holiday shopping season is starting as early as November 1st, according to Reuters.
Of course, peak sales season seldom affects one or two companies but rather an entire marketplace. This means every company is vying for the same transportation resources, which makes maintaining delivery schedules for high-order volume fulfilment even more difficult. Parcel carriers and delivery firms are perhaps the most impacted by seasonal demand. For example, UK delivery firm Yodel has requested clients to divert parcels to other carriers due to unprecedented demand.
To maintain customer satisfaction and retention, businesses not only have to ensure they have enough stock to fulfil orders, but they need to ensure carriers can deliver the packages on time. To do so, businesses need to adopt strategies that ensure uninterrupted service even in the face of uncertainty. A key solution lies in diversifying carrier options, adopting contingency plans, and integrating flexible, dynamic allocation software that allows businesses to pivot seamlessly when disruptions hit.
Anticipating Sales Volume Fluctuations
To anticipate sales volume fluctuations, businesses can leverage historical sales data, market trends, and seasonal demand forecasting tools. By analyzing these data points, businesses can identify patterns and trends in customer demand and adjust their inventory levels, supply chain, and logistics accordingly. This proactive approach ensures that businesses have the right products in stock at the right time to meet customer demands.
Seasonal demand forecasting involves using advanced analytics and predictive models to estimate future sales volumes. These tools can provide valuable insights into when demand is likely to peak and which products will be in high demand. By incorporating these forecasts into their planning processes, businesses can optimize their inventory management and supply chain operations to handle the increased order volumes effectively.
7 Strategies for Managing High-Volume Order Fulfillment
With peak season around the corner, order volumes are bound to start creeping upwards. Rather than being caught unprepared, here are 7 strategies to maintain the entire order fulfilment process while keeping customers satisfied.
1. Embrace Carrier Diversity
You know the saying, “Don’t put all of your eggs in one basket?” That couldn’t ring more true in today’s ecommerce marketplace.
The shopping period between Thanksgiving and Cyber Monday this year broke records, with UK shoppers spending more than 3.63 billion pounds—a 5.2% increase from 2023! And while that means more revenue for businesses, it also puts pressure on carriers to deliver significantly more packages on time.
One of the most effective ways to safeguard your supply chain against disruptions is through carrier diversity. Relying on a single carrier is risky, especially when demand surges or the unexpected happens. By establishing relationships with multiple transportation partners across various modes and companies, you can:
- Create a resilient network that can withstand seasonal demand surges
- Reduce the impact of localised disruptions
- Maintain delivery promises even during peak season
- Leverage competitive pricing and service options
This approach not only provides flexibility, but also ensures that your business has alternative options readily available when one carrier experiences difficulties.
2. Seasonal Demand Forecasting
Accurate demand forecasting is the key to successfully managing high order volumes. While knowing exactly how much will be sold at any given time is pretty much impossible, there are plenty of predictive models, AI, and other software programs that can assist with trend analysis to help predict seasonal demand. Additionally, order management software can enhance this process by providing a centralized platform for managing incoming orders, automating tasks, and integrating with other systems to improve accuracy and efficiency.
3. Leverage Technology to Improve the Customer Experience
Putting the customer experience front and centre of operations is the secret to building a successful business model. With ecommerce being what it is, customers can order anything from anywhere, making it incredibly more difficult for a company to distinguish themselves from the competition. Leveraging technology can significantly impact the customer experience during peak demand periods:
- Proactive communication: There are few things that will irritate a customer more than a cumbersome process to figure out where their package is and, more importantly, when it will arrive on their doorstep. Businesses can utilize Metapack’s automated notification system to keep customers informed about their shipments via email or SMS. Having a system in place that will notify customers of delivery updates and provide real-time tracking does wonders for soothing that irritation and turning customers into repeat patrons.
- Branded tracking experiences: Create custom order tracking pages that align with your brand identity to provide a consistent and professional experience throughout the delivery process.
- Alternative delivery options: Offer customers flexibility in how they receive their orders, such as click-and-collect or alternative pick-up locations to alleviate pressure on traditional delivery methods.
Returns are another big focal point, especially during the ecommerce system. Having a strong reverse logistics system in place with a focus on making it as easy as possible for customers will not only save time and money but also improve the customer experience.
4. Optimize Inventory Management and Warehouse Tracking
A popular strategy, especially for ecommerce fulfillment, is to operate out of multiple warehouses. By having inventory staged in various geographical locations, it can reduce the necessary fulfilment mileage and shorten the strain on logistics. A third-party logistics provider can assist with managing multiple inventories and reducing fulfilment mileage. Of course, managing multiple inventories can be a risky endeavor without the right management system.
Automating inventory processes is another way to address the challenges of managing seasonal demand. These systems provide real-time visibility into inventory levels, streamline order fulfilment processes, and reduce the risk of human error. By automating inventory management, businesses can improve accuracy, reduce costs, and enhance overall efficiency.
5. Flexible Fulfillment and Fulfillment Costs
A rigid and standardized logistics system often lacks the agility necessary to keep pace with any meaningful increase in demand. Building flexibility into logistics is a fantastic strategy not only for dealing with increases in demand but also for offsetting disruptions such as a potential port strike, labor shortage, canal drought, or any other number of events that seem to occur with alarming regularity.
Flexible fulfilment can take any number of forms, from working with a wide carrier network, providing different shipping options such as drop shipping, working with third-party logistics providers (3PLs) or operating out of multiple fulfilment centres.
6. Utilize Dynamic Allocation Solutions
To optimise your shipping strategy and respond swiftly to changing conditions, consider implementing dynamic and flexible allocation software, like Metapack. These advanced solutions offer several advantages, including:
- Real-time adjustments: Quickly reallocate shipments based on carrier performance, capacity, and cost without requiring extensive development work.
- Intelligent routing: Automatically select the most cost-efficient and timely carrier for each shipment based on predefined rules and real-time data.
- Enhanced visibility: Gain comprehensive insights into your entire delivery operation, allowing for data-driven decision-making to continually improve the customer experience and efficiency of your operation.
7. Implement Robust Contingency Plans
When it comes to the unpredictability of ecommerce, your business needs to prepare for every possible scenario. Having a solid contingency plan is essential for managing unexpected disruptions. Consider implementing the following steps:
- Designate a business continuity point person: Appoint a dedicated individual with the authority to make quick decisions and manage crisis situations at the drop of a hat.
- Identify potential disruptions: Create a comprehensive list of every potential thing that could go wrong with your shipping operations. Include everything from weather events to peak season demands.
- Establish clear protocols: Develop step-by-step procedures for addressing each type of disruption to ensure that all team members clearly understand their roles.
- Cultivate carrier relationships: Build strong connections with your shipping partners and identify key contacts for emergency situations.
Optimizing Supply Chain Execution for Seasonal Demand
Managing supply chain and logistics is critical for businesses to ensure that they can meet customer demands during peak seasons. This involves optimizing inventory management, supply chain execution, and logistics to ensure that products are delivered to customers on time and in good condition.
Effective supply chain and logistics management require a holistic approach that considers every aspect of the order fulfilment process. From sourcing raw materials to delivering the final product, each step must be carefully coordinated to minimize delays and maximize efficiency.
Supply chain execution involves the coordination of all activities involved in the production and delivery of products to customers. This includes sourcing raw materials, manufacturing, warehousing, transportation, and delivery. By optimizing supply chain execution, businesses can ensure that products are delivered to customers on time and in good condition, which can help to improve customer satisfaction and loyalty.
To optimize supply chain execution, businesses can use various strategies such as:
- Implementing Just-in-Time Inventory Management: This approach minimizes inventory holding costs by receiving goods only as they are needed in the production process, reducing waste and improving efficiency.
- Using Third-Party Logistics Providers: Partnering with third-party logistics providers (3PLs) can help businesses scale their logistics operations quickly and efficiently, especially during peak seasons.
- Investing in Supply Chain Management Software: Advanced software solutions can provide real-time visibility into the supply chain, enabling businesses to make data-driven decisions and respond quickly to changes in demand. A great example is Metapack’s delivery management software, which offers dynamic shipping rules paired with an extensive carrier library. This allows retailers to efficiently adjust shipping volumes based on demand fluctuations and quickly pivot in the event of service disruptions.
- Developing Relationships with Suppliers and Logistics Providers: Strong relationships with suppliers and logistics providers can enhance collaboration and ensure a more reliable supply chain.
- Implementing Quality Control Measures: Ensuring that products meet quality standards at every stage of the supply chain can reduce the risk of returns and improve customer satisfaction.
By optimizing supply chain execution, businesses can ensure that they can meet customer demands during peak seasons and improve their overall competitiveness in the market.
Winning the Seasonal Demand Rush
Winning during the peak seasonal demand can take many forms, depending on what your goals are. For some companies, it’s simply a matter of keeping up with orders and managing the entire order fulfilment process. For other companies, it’s about creating brand loyalty during a time of high expectations and giving customers a reason to keep coming back.
Whatever your goals may be, having the right solutions in place makes all the difference.
Whether you’re looking for access to a comprehensive carrier network, looking to improve the post-purchase customer experience, or simply looking for a better way to handle fulfilment, Metapack has the solution.
Click here to learn more about how Metapack can help you win during peak demand season.