Meet holiday fulfillment demand with our Peak Season best practices for ecommerce brands and 3PLs

The holidays can be a double-edged sword for ecommerce brands. With consumers merry and flush with bonuses, online shopping skyrockets, promising a windfall. However, the boom increases 3PL holiday fulfillment demand, triggering unwanted issues such as inventory stock-outs, carrier congestion, warehouse space constraints, and labor shortages. Add into the mix heightened consumer expectations, and that Peak Season pressure on fulfillment teams may be enough to turn hair gray.

But with strategic planning, fulfillment teams and 3PLs can optimize shipping, warehousing, and delivery processes proactively for successful order fulfillment. This can increase customer satisfaction and allow ecommerce brands to cash in on the festive rush. True, strategic holiday planning has many facets. So, how do you begin? For starters, here are some best practices for fulfilling holiday orders that warehouse managers can incorporate as plans take shape.

Conduct accurate demand forecasting

While the Peak Season shopping boom is recurrent, it’s never static. For instance, this year’s Christmas season sales are set to increase over last year’s. Moreover, demand fluctuates throughout the season. It shoots up at the start of the holiday shopping season as shoppers maximize early bird discounts, then plateaus mid-season, only to increase again during a last-minute shopping rush.

Demand forecasting enables 3PLs to navigate these dynamic patterns. Warehouse managers can apply the strategies discussed below to maximize demand forecasting accuracy.

Leverage Historical Data

Historical ecommerce data is a goldmine of insights crucial for accurate demand forecasting. For instance, past holiday sales can reveal the best and poor-selling products, average peak ordering times, and average shipping times. Combining this historical perspective with advanced predictive analytics allows a brand to:

• Project future demand for various inventory items with greater accuracy
• Anticipate and prepare for peak ordering seasons and periods
• Identify and address potential supply chain bottlenecks
• Adjust shipping strategies to meet expected delivery timeframes

Collaborate with Internal Teams

Marketing campaigns, new product releases, and special offers influence holiday sales volumes. Coordinate with marketing, sales, and product teams to prepare for upcoming promotions and product launches that could influence demand. For instance, new products often perform significantly well during gift-giving seasons as consumers actively search for new and exciting products.

Monitor Market Trends

Market-wide developments impact consumer behavior, purchasing patterns, and demand. Here are some key trends currently influencing ecommerce demand:

• Thoughtfully consider sustainability: Growing environmental consciousness has increased the demand for sustainable and eco-friendly products.
• Be a leader in tech advancements: In recent years, major players have adopted big data analytics and AI, raising the bar in fulfillment efficiency. This has improved overall consumer experiences and increased confidence in online shopping.
• Stay informed about inflation: With 85% of consumers planning to cut back on non-essentials this holiday season due to inflation-induced price increases, ecommerce brands expect a fall in demand.

Use 3PL software to optimize inventory management

Holiday shopping patterns are unpredictable. Flash sales and time-sensitive deals cause rapid depletion of regularly used items while gift-giving trends can cause sudden spikes in typically slow-moving items. 3PLs should work on the following strategies to optimize inventory management for peak season:

• Think through inventory visibility and control: Real-time inventory tracking allows for immediate updates across all sales channels, enabling warehouse managers to maintain optimal stock levels across all fulfillment centers.
• Plan for strategic stock placement: To ease stock placement and distribution, fulfillment providers should consider technologies such as Logiwa’s directed putaway, which uses AI to optimize inventory arrangements based on a warehouse’s layout.
• Automate replenishment: To meet customer expectations for faster deliveries, warehouse managers should consider using fulfillment management systems with barcode scanning or Radio Frequency Identification (RFID) tech to automate restocking.

See how Logiwa IO’s Directed Putaway helps optimize inventory management.

Scale resources and staffing

To prepare for heightened demand during the holidays, 3PLs need to scale resources and staffing by implementing seasonal staffing strategies such as:

• Start now on seasonal workforce planning: To manage the holiday surge, team leaders should onboard temporary workers and provide them with holiday-specific fulfillment training in advance. Using a WMS with predictive analytics can ease seasonal labor planning.
• Consider staffing options: Implement strategies such as part-time shifts and automation to ease scaling a workforce up or down as needed and optimize labor costs without neglecting service-level agreements (SLAs).
• Check out workforce management software: Workforce management tools can significantly simplify labor planning. For instance, Logiwa’s labor standards harness predictive analytics to review and generate insights on employee performance and incoming orders.

Automate warehouses with WMS software

The warehouse is the backbone of the fulfillment process. Consider these approaches for effective warehouse optimization for holidays.

Choose efficient warehouse layouts

To maximize warehouse space and enhance fulfillment processes, warehouse managers can place fast-moving items in easily accessible locations. A flow-rate design whereby goods move directly to outbound trucks can also significantly streamline warehouse operations during peak seasons.

Automate everything

Automated solutions for repetitive tasks, such as picking arms and other cobots, reduce error rates and fulfillment speeds. In addition to bots, check out tech-like conveyor systems for high-volume orders. Check out this article for Peak Season specific automations to help you meet demand.

Establish clear workflows for orders

Create strategies to achieve  a seamless workflow for managing high-volume orders effectively. Establish priority systems for urgent orders, create efficient pick paths, and implement quality control checkpoints to ease high-volume order management while ensuring accuracy.

Refine shipping and transportation

Holiday shoppers expect expedited deliveries. 3PLs who meet these expectations refine shipping deadlines and carrier management in advance by implementing the following strategies:

• Be proactive with carrier partnerships and negotiations: 3PLs who partner with carriers before the holiday rush are often guaranteed the necessary capacity even when carrier congestion is high. They can also negotiate and lock in favorable rates.
• Optimize routes and delivery times: As warehouse managers scramble to deliver holiday goodies, customs may understandably experience delays. Use route optimization tools to identify and plan the most efficient delivery routes.
• Introduce shipping deadlines: Set and communicate shipping deadlines through websites and in marketing materials to reduce last-minute rush orders.

Ensure a smooth return process

An ecommerce brand may have the best order picking and packing systems but still experience returns due to incorrect order placement by customers. Here are some tips for a streamlined process:

• Establish efficient returns management in Peak Season: Draft up a fair returns policy and consider dedicated returns centers and a cloud-based returns management solution.
• Be prepared for post-holiday returns: Train teams on efficient return handling and implement a system to quickly re-shelf or dispose of returned items. Also, consider assigning cobots to repetitive return tasks such as sorting, picking, or transporting returned items.

Track key performance indicators

Holiday shopping patterns shift quickly and, as such, require fast responses. To that effect, 3PLs can implement the following tactics.

Focus on relevant kpis for holiday success

Order accuracy, shipping times, and customer satisfaction rates are the most relevant holiday fulfillment KPIs. For example, if shipping times are consistently more prolonged than expected, it may indicate issues with carrier performance. Fulfillment managers can switch to another carrier or engage multiple carriers.

Implement real-time monitoring

Using dashboard systems to monitor fulfillment performance can ease KPI tracking. Consequently, 3PLs can swiftly address issues before it impacts customer satisfaction.

Team up with Logiwa and ring in the holidays with cheer

Adopting these order fulfillment best practices can help warehouse managers streamline ecommerce fulfillment operations during Peak Season. From reducing costs through efficient inventory management to enhancing customer experiences with faster shipping and smoother returns, these strategies can assist 3PLs with turning the holiday boom into a profit-minting machine.

However, remember that successful holiday fulfillment starts with early planning. Strategizing before the festive season strikes allows warehouse managers the flexibility to scale up or down when unexpected demand changes occur. But even if the holiday season is nearly here, there is still time to refine fulfillment processes.

Schedule a call with a Logiwa fulfillment specialist today to discuss how Logiwa can come alongside warehouse managers to fulfill brilliantly for customers this peak season and beyond. 

FAQs about Peak Season holiday fulfillment