While the weather outside may suggest otherwise, the countdown to Christmas has begun, writes Kiel Harkness, marketing director of UPS UK, Ireland and Nordics. In the run up to this year’s festive season, we can pair a retrospective with a forward-looking lens at what can help retailers ensure a profitable and efficient holiday sales season.
Last year was UPS’s 108th festive shipping season, and we’ve continued to learn important lessons. During peak season 2015, UPS successfully delivered 612 million packages. On the 22nd of December alone, our peak delivery day, we delivered over 36 million packages – double the normal daily average. This success was in large part due to the 1,300 additional staff hired in the UK, and 90,000 globally, to support the increase in online shopping and package volume that we anticipated would begin in November and continued through January 2016.
The rise in package volume – much attributed in the rise of online shopping volumes – is poised to continue this holiday season, with retailers looking for early and accurate anticipation measures.
In the age of the ‘flex shopper’ – one who is constantly connected to retailers through technology – consumers want access and purchasing power at a faster pace and with greater ease. As such, the single best way that retailers can prepare for peak is to ensure that their supply chains have an onmi-channel focus – creating a continuity in the customer experience.
To stand-out in heavier holiday competition, retailers must offer consistent and reliable shopping experiences across every retail channel (stores and online) and device (laptop, tablet, smartphone). As retailers adjust their supply chains to consumers who frequently shop online, they should focus on three key areas: brick-and-mortar, out-of-stock scenarios and cross-border returns.
- Brick-and-mortar: The physical store must evolve to be more than just a point of sale destination. With footfalls shrinking as online consumerism grows, UK retailers will have to go beyond the traditional purpose of a retail store, and use it as part of its inventory and distribution network.
- Out-of-stock scenarios: UPS research has shown that one of the most common way to lose an online customer is when a desired product is out-of-stock. UPS consumer research found that when faced with an out-of-stock item, 41% of European consumers say they will go to a competitor’s website or app, with 20% saying they will go to a competitor’s physical store. The UPS Pulse of the Omni-channel Retailer research shows that online businesses are quite responsive to out-of-stock challenges but physical stores lag behind. Almost half of physical retail stores (45%) simply suggest customers wait, without providing an alternative. The omni-channel strategy provides enhanced inventory accessibility to storefronts and customers, providing for fewer stock-outs.
- Cross-border returns: Retailers that want to win and retain customers have to integrate returns into their omni-channel offer. UPS’s Pulse of the Online Shopper survey found that a hassle-free returns policy is a key decision maker for those making online purchases, influencing a consumer’s likelihood to complete a sale. Currently, 61% of UK retailers are charging for the return process if the items are not damaged or defective, well above the European average of 43%. Working with a third-party logistics provider can help improve cost-effectiveness, and make the process as smooth as possible for all parties involved.
An omni-channel focus ensures that retailers have the tools to approach, and successfully operate during peak period. With consistent and positive experiences, customers are better serviced and better retained both in the run-up to the festive season, and long after a package is opened.