holiday // planning
Get ready for a very competitive holiday season.
There’s no denying that the holiday season has grown tougher and more complex in recent years. Last year, sales during November and December increased 3% to $626 billion. Not terrible, but it was less than the 3.7% growth the National Retail Federation initially forecasted. Factors including weather, inventory challenges and early deep discounting by many retailers were cited as significant drivers.
At the same time, shoppers found themselves more in control than ever before, with ever-increasing options on where and how they will shop.
There is, of course, no way to predict how the weather and other factors will turn out for the upcoming holiday season. But it’s not going out on a limb to make one prediction: Shoppers will increase their use of technology to aid — or even complete — the shopping process. Mobile devices have transformed the shopping landscape, and retailers who want to succeed have no choice but to optimize their mobile retail experiences.
“Mobile is the bridge between the digital and physical spaces,” said Casey Carl, chief strategy and innovation officer at Target Corp., in a session at Shoptalk in May.
A recent study by Facebook IQ, “Decking the Digital Halls,” found that more and more people will use digital technology — mobile, in particular — to connect and shop during the holiday season. It noted that mobile platforms like Facebook and Instagram have emerged as important sources of gift inspiration.
At the same time, the physical store now stands as a crucial element in the omnichannel shopping journey. Cross-channel transactions, which refer to purchases using in-store and at least one online channel, now account for 38% of all purchases, according to the fifth annual UPS Pulse of the Online Shopper study. Half of shoppers who buy online have the purchase shipped to a physical store for pickup.
Fortunately, consumers are not the only retail participants who can use technology to help ensure the upcoming holiday shopping season is a merry one. Here are some suggestions and examples on how retailers can leverage advanced IT systems to support holiday operations in three critical areas: e-commerce, fulfillment and workforce management.
Ecommerce
During the 2015 edition of Cyber Week — when retailers generate a good portion of their online holiday sales — several high-profile site outages hit major chains. Some of the biggest names in retail, including Walmart, Target and Neiman Marcus, experienced varying degrees of site issues at some point during Cyber Week.
More recently, Amazon.com had some transactional problems during its Prime Day event in July, which creates more online traffic than Black Friday. Unlike the banking industry, there is no such thing as “too big to fail” in e-commerce.
What can retailers do to stave off similar online outages during the 2016 holiday season? For 100 years, the Boy Scouts have operated by the motto “Be Prepared.” Retailers anticipating large volumes of online and mobile shoppers need to take the early 20th-century Boy Scout strategy and amp it up for the early 21st-century holiday season. No matter how much bandwidth or supporting infrastructure a retailer already has, it must assume it is not enough to guarantee uninterrupted site performance during the holiday season. Fortunately, in an age of elastic cloud services and massively parallel processing, backup capabilities are virtually limitless.
Retailers must make the investment and preparations now to be able to stretch their capacity to handle whatever amount of digital demand comes their way in the next few months. This probably will mean contracting a third-party service provider, maybe even one with its own competitive e-commerce offering.
Whatever option is chosen, retailers must do what is necessary to maintain constant uptime. Having adequate backup and not needing it is better than needing it and greeting holiday shoppers with an error message.
It’s also worth noting that for retailers that experienced Cyber Week site issues, Twitter was an especially valuable tool for monitoring and responding to consumer complaints, as well as issuing general public updates. Twitter allowed a platform for real-time conversations with irate customers and enabled retailers to inform consumers about the site’s status.
After the fact, retailers that utilize Twitter also have a valuable trove of data that can be carefully analyzed to determine if specific factors drove the most consumer complaints (such as slow checkout versus images not loading, etc.) and if certain keywords in corporate tweets produced a more positive response.
Fulfillment
In addition to preparing their e-commerce sites for increased volumes of holiday traffic and transactions, retailers must also make sure holiday orders can be successfully executed across all channels. These include, but are not limited to, buy online pickup in store, ship from store and mobile purchases.
One valuable and less obvious tool that can help support seamless fulfillment during the holiday crunch is the point of sale. From manual cash registers to client/server-based terminals, the image of the POS as a fixed box that receives payment and distributes receipts has stayed pretty much the same.
In recent times, that has all changed. The POS can now serve as the heart of a healthy and lively omnichannel shopping experience. Many retailers have now partially or wholly replaced their installed base of fixed POS terminals with mobile devices. As a result, they can offer mobile self-checkout service to consumers.
On the back end, real-time connection to order management, distribution and fulfillment systems enables retailers to leverage the POS as a seamless inventory management application. The moment an item is purchased, the POS can notify the appropriate personnel and/or systems that a replacement item is needed.
Whether this means bringing something out from the back room or scheduling a delivery from a fulfillment center, the POS can serve as a valuable tool for minimizing holiday out-of-stocks or supply chain mistakes. Especially as omnichannel purchases complicate tracking inventory and assigning credit for sales, having the POS as a real-time fulfillment management solution is a significant benefit.
Having the proper order management technology is also critical to ensuring uninterrupted omnichannel fulfillment capabilities during the busy holiday season. For example, Phoenix-based, 1,450-plus-store pet supplies chain PetSmart tapped Manhattan Associates’ enterprise order management solution to provide enhanced seamless fulfillment capabilities in support of its e-commerce business.
The solution, which PetSmart plans to deploy this fall, is part of a larger strategic initiative to significantly enhance its omnichannel and digital capabilities.
As a result of the implementation, PetSmart hopes to obtain a comprehensive, full-picture view of product inventory in e-commerce-dedicated warehouses, distribution centers and at the local store level. This allows PetSmart to get product packages to online shoppers when and how they want them. The retailer can also offer seamless fulfillment features to customers, such as subscription and customized home delivery services.
“Our pet parents are passionate about the well-being of their pets and we want to be the trusted partner to pet parents everywhere by offering a range of ways to shop and engage wit