The recent heatwave, and talk of another, may have marked the height of summer for many in the UK, but for retailers it should also have been a trigger for finalising Christmas strategies. The onset of ecommerce has shaken these preparations up – the UK has embraced online commerce and has the third biggest ecommerce market globally according to AT Kearney. In fact last year we saw Black Friday sweep UK retail with a consumer spend of £810 m in a single day.
All planning should be based around this changing market. At eBay Enterprise, we identified internal communications, staffing levels, fulfilment, and contingency planning as the areas retailers need to address this summer to be ready for the Christmas rush.
Peak Planning Board
Christmas planning is a huge operation and the scale requires transparency and collaboration right across the business. Setting up a cross-departmental ‘peak planning board’ should be every retailer’s first move this summer, beginning in mid-July at the latest. All planning should allow for the knock-on effect to other departments; the impact of marketing campaigns on warehouse operations, for instance. Ensure that seasonal campaigns or promotions benefit from changes to warehouse staffing levels and layouts requires plenty of cross-departmental communication, which should be facilitated by a team that reports directly to the board.
Retailers should begin planning their seasonal staffing requirements in July and, again, changing customer habits should lead to changing hiring practices. The uptake of ecommerce has changed retail and hiring and training should reflect this. Retailers need to think now about enlisting seasonal sales staff for three key areas: the shop floor, online and telephone customer service and fulfilment. Most importantly these functions need to be integrated and training for seasonal staff should reflect this. Hiring should allow sufficient time for staff to be trained in September to provide the vital customer experience when Christmas shopping starts in October.
But don’t think that festive retail stops once the big day has passed. Our research points to return rates being at their highest in the weeks following New Year, and it is important to ensure you still have enough staff on hand to manage that demand.
Fulfilment robustness and returns
Managed correctly, retailers can fulfil 20 to 40% of online orders using a combination of click-and-collect and ship-from-store, fulfilment models that turn physical stores into a network of mini-distribution centres. Decentralising fulfilment acts as an effective insurance policy against unforeseen disruption such as that caused by inclement weather. This is particularly important at Christmas, but not always front of mind in July.
Finding the right delivery partners is just as important as deciding on a fulfilment model – it is often the retailer’s reputation that is damaged when something goes wrong. Getting carriers to agree to strict service level arrangements or stress-testing can be difficult, but retailers can request performance data and research traditional and social media for potential pitfalls.
Peace of mind is more important than cost given the volumes of online delivery in November and December. Retailers can spread their risk by working with multiple carriers, and using tools enabling on-the-fly carrier-switching based on dynamic performance and availability data. Last year, October was when online orders begin to pick up ahead of the festive season, so we recommend having partnerships in place at least a month beforehand.
For all too many retailers, Christmas conjures up scenes of crisis. Late deliveries, early discounting and website failures can do acute damage to retailers’ reputations at this time of year. To avoid this fate, eBay Enterprise urges retailers to strengthen crisis preparation and ensure that purchases can continue even if online operations fail. September and October is the time to conduct functional and load testing and ensure that websites are able to handle prolonged high demand. It is not just the front end you should worry about, but also payments and CRM systems.
The popularity of online shopping in the run-up to Christmas increases every year, and Black Friday has intensified and extended this period of heightened demand. The uptake of omnichannel has thrust many retailers out of their comfort zones, but retailers can still succeed by planning ahead and allowing for these changing trends. If retailers integrate these changing consumer preferences across their hiring, fulfilment and stress-testing then they could start wrapping Christmas up early in the July heat.
Tobias Hartmann, VP and GM Enterprise Services and International, eBay Enterprise