Guest Column | December 2, 2019

Get Retail Fulfillment Right This Holiday Season

By Yan Krupnik, Retalon

retailers face security holes this holiday shopping season

Retail fulfillment is exceptionally important during the busy holiday sales season. Here are some tips to get it right.

Increasing orders is only half the battle for retailers, particularly during the holidays. The real challenge comes with how to fulfill orders in a cost-efficient manner the is convenient for the customer.

“Last-mile retailing” is critical to get right. The consequences of not finalizing in fulfillment are costly and can really hinder your relationship with customers – especially during the busy holiday sales season.

If a product that was intended as a gift doesn’t arrive on time, it will most likely be returned. If the returned items are seasonal, they can’t go back on the shelf, leading to unsellable (or steeply discounted) excess merchandise.

Now is the time to ensure your holiday fulfillment plan is locked, loaded and ready to deliver all season long.

The Challenges Of Retail Fulfillment

Customers expect speedy and convenient fulfillment options like buy-online-pick-up-in-store, pick-up lock boxes, deliver to office, ship to local store, and more.

Offering lots of flexible fulfillment options may make your customers happy, offer you a competitive edge, and help you avoid lost sales. However, a recent Gartner report showed that retailers that offer “too many” options are spreading themselves thin. According to Gartner VP Analyst Robert Hetu, retailers are also hurting their revenue gains with costly levers such as same-day delivery, free shipping, and free returns.

Retailers need to figure out the top options for them, ones that truly offer convenience and improved fulfillment speed – and then, double down on those options. Focus on customer service consistency and better communications to increase customer awareness and engagement through your ideal fulfillment options.

Unified Commerce Inventory Issues: When "Convenient" Fulfillment Efforts Go Wrong

Let's look at BOPIS (Buy Online, Pick Up In-Store) as an example of a fulfillment option that must be carefully monitored and managed to truly provide value for both the customer and the retailer.

It's easy to see why BOPIS is growing in popularity: Consumers can avoid shipping fees and get their product faster and on their schedule. Retailers are also benefiting from the extra sales they make when the customer comes into the store to pick up the merchandise. Oftentimes, customers picking up in store end up purchasing additional products as they're picking up their online orders.

During the holidays, gift idea displays at the front of the store can trigger thoughts for gift ideas that BOPIS customers never even considered before viewing that initial gift display in person. However, sometimes brick-and-mortar retailers run out of in-store stock because of unintended online order fulfillment needs. They end up losing regular sales because things are out of stock. If retailers usually fulfill online orders from a warehouse, they must decide how much stock to keep in-store as well. If they start fulfilling online orders from stores, the warehouse can end up overstocked, tying up cash and space.

BOPIS sounds great in theory, but in practice retailers need to ensure e-commerce, store, and DC systems are fully aligned for this convenient fulfillment option to really pay off in the long run.

Leveraging Technology For Proactive Holiday Fulfillment

Predictive analytics allows retailers to know in advance how much inventory they need to purchase and where it needs to be allocated (warehouses, store locations, etc.) in order to fulfill orders in a cost-efficient way.

These systems provide much better visibility into future orders, consumer behavior and demand. They also proactively account for a multitude of factors – seasonality, geo-demographic diversity, competition, promotions, consumer demand, current and future inventory levels etc. – which is impossible to do efficiently in a manual way.

Moreover, predictive analytics can help with returns. They are unavoidable, but they can be managed significantly better, saving retailers lots of money and headaches. Retail AI & Predictive Analytics Solutions can recommend where to send returns so that they go to the store most likely to sell the product again rather than back to a warehouse, or to the nearest store. During the holidays, it’s critical that items, especially seasonal ones, go back to the location where there will be most in demand.

Set Yourself Up For Success For The Holidays And Beyond

No matter what your strategy is this holiday season or for future ones, it's important to be prepared and proactive about your fulfillment needs. As post-Thanksgiving holiday sales pick up, have fulfillment forecasts ready proactively to position inventory across your business to match with demand. After all, high-touch customer service and timely delivery during the holiday season often means loyal, repeat customers in the New Year.

About The Author

Yan Krupnik is the Director of Business Development at Retalon. Founded in 2002, Retalon is an award-winning provider of advanced retail predictive analytics & AI solutions for supply chain, planning, merchandising, inventory management, pricing optimization, with a transformational approach to the retail industry. From inception, Retalon solutions were built on one unified platform powered by advanced mathematics & AI resulting in higher accuracy and the ability to optimize unique and complex retail processes. Visit www.retalon.com to learn more.