The retail rush: 7 ways to prepare for next sales peak

With Australian eCommerce sales on a growth momentum, now is the time to start planning for the November and December peak period. Here are seven considerations for your warehouse and retail teams to help you deliver on your customer promise.

Key points

  • Your delivery experience underpins your customer promise.
  • Work closely with your logistics partner to plan ahead.
  • Consistent fulfilment processes can help mitigate risk of delay.

With momentum in online sales triggered by COVID-19, it’s especially important to prepare ahead for the next peak – which could arrive just as unexpectedly ahead of Christmas – and check how resilient your supply chain is to demand and distribution shocks.

In the week after Easter, online purchases hit a peak of 135% year on year growth,1 and we saw more people shopping online than ever before.1 But logistics assets are relatively fixed: unanticipated surges in volume can put pressure on delivery networks, warehouse staff and systems.

Online shoppers have also told us they’re more concerned than ever about delivery cost and speed: 34% said ‘shipping charges are too expensive’ is the main barrier to shopping online more.2

Having strong and reliable supply chain partnerships has never been more important.

“Australia Post’s role is to underpin our customers’ customer promise” says Claire Bourke, Australia Post’s General Manager Customer Solutions and Partners, noting “we saw major retailers rapidly accelerate eCommerce plans in just six to eight weeks, as a result of the first COVID lockdown.”

“We worked with them to evolve their ecommerce capabilities, enhance customer experience and improve supply chain resilience, so they could deal with changes in demand. These included unexpected lifts in categories like home office equipment or hair dye during the lockdown.”

“It’s important to understand where any points of failure in the supply chain could be, and how to mitigate those risks,” she adds.

For Brisbane-based gift hamper business Gift Basket, stock control is a key part of planning for peaks. Its high level of customer satisfaction was recently recognised with a Canstar Blue award, and Managing Director Patrick Smitka says partnering with Australia Post’s Star Track was key to meeting their delivery promise.

“We also do everything we can not to run out of stock – to reduce the need to substitute products within each hamper, even at Christmas,” he says.

Most Gift Basket products are sourced within Australia but some, when there are no alternatives, ship from China. Smitka is already planning for possible international supply chain shocks this year by overstocking these items, as well as Australian products in high demand.

“Christmas represents a quarter of our turnover, and I’m forecasting volumes to double this year. So we’re keeping around six weeks’ stock on the shelves, rather than three or four weeks as we would usually do,” says Smitka.

In addition to procurement, here are seven other considerations to help ensure you’re ready for the next sales lift.

1. Plan and share your volumes

2020 is certainly presenting challenges for accurate sales forecasting. “We expect online spend to - hold a 15% share of the total retail market by the end of 2020,”3 says Bourke.

However, this year’s Christmas spend could also be affected by changing economic conditions and consumer confidence. Simon Pippett, Australia Post’s Head of Service, Enterprise encourages retailers to work with Australia Post to manage peak planning.

“It’s important to let us know when you expect volumes to materially change,” he says. “If you are running a promotion, let us know. We can then manage the back end and be ready to receive the goods.”

For example, Gift Basket has seen an increase in conversion rates since running a free shipping promotion. Instead of charging a flat $12.95 for next-day delivery, shipping is free for orders over $100 and a flat-rate of $5 for all other orders.

Smitka says people seem to be more sensitive to shipping costs right now, and this encourages customers to add extra products to their hamper to reach the free shipping threshold. “If we can increase conversion by 3% it’s worth wearing the shipping cost.”

Volume projections can also help with ULD and pallet forecasts, and will help you order the right quantity of supplies and ULDs via Australia Post’s Lodgement Quality System (LQS).

2. Be prepared to manage customer expectations

Setting customer delivery expectations at checkout can make a big difference to their satisfaction. “Transparency is critical, as if shipping times are quoted inaccurately it can lead to downstream costs such as increased customer calls,” notes Bourke.

It’s important to include internal pick, pack and lodgement process time within your quoted shipping times – not just the Australia Post delivery timeframe – as that could add an extra few days.

Address validation prompts at checkout can also reduce the risk of delay. “During the lockdown, we worked with merchants to automate reminders to ensure deliveries went to the right addresses,” says Bourke.

Some shoppers had set their workplace as a default shipping address, but were now working from home, so this ensured shipping choices were considered carefully.

Pippett notes address validation can also remove another common cause of delivery delay: incorrect postcodes. “We can help you automate this via APIs.”

You should also check your warehouse management systems can cope with massive volume spikes – especially if you use a hybrid fulfilment model with multiple distribution centres or store fulfilment. If inventory levels are not updated in real time, customers may be disappointed by order cancellations or split shipments.4
 

3. Store stock close to customers

For Gift Basket, summer Christmas presents an additional challenge: the risk of chocolates melting if they are shipped via road. Most of its interstate hampers travel by air, however this proves expensive for large corporate hamper orders.

So Smitka says he is also planning to store stock in Sydney and Melbourne to manage November and December demand. “This will make it even easier to fulfil our next-day promise, and reduce the cost of sending bulk quantities of hampers by air.”

Partnering with a 3PL, such as Fulfilio which is owned by Australia Post, can be a simpler way to decentralise fulfilment, if you want to have multiple state-based distribution centres that locate products closer to the end customer.

4. Prepare and optimise your packaging processes

Fulfilling from stores has become the ‘new standard’ for flexible and scalable eCommerce logistics5 – but it presents peak period challenges. Retail staff need to be trained to use packaging efficiently, and achieve a consistent and high quality unboxing experience.

“Packaging needs to be robust: sturdy, stable and safe,” comments Pippett. “For example, if a sports store sends a single t-shirt or pair of trainers in a massive box because it’s the only packaging they have, it’s really cost-inefficient – and it could get crushed more easily.”

Every ULD or pallet needs two VISA labels attached to it – a visual identifier that is your entry point to the network. Every parcel needs a barcode label. If it can’t be scanned (such as due to low ink quality), Australia Post’s remediation label ensures it can still be delivered but won’t be visible in the network.

That’s why it’s also essential to ensure you have enough packaging material on hand for peak delivery periods – including printer ink, barcode labels and tape.

Smitka says his warehouse systems are always set up for peak periods, year round. “We have four computers ready to print labels for example, even though we usually only need one.”

5. Present your freight correctly

“The way you present your freight to Australia Post is also important to ensure it moves through our network safely and efficiently” says Pippett.

He highlights the importance of maintaining packing and lodgement standards during peak periods. “Streaming arrangements need to be retained. Make you have sufficient space to sort parcels by size, speed and destination – this is even more important in peak periods.”

6. Send manifest data on the same day as lodgement.

When a manifest transmits data digitally, this triggers a delivery notification to the customer.

“If you send it too early – such as two days before the parcel is collected from your warehouse – an early delivery notification could cause customers to become anxious about where their parcel is,” explains Pippett.

“Send it too late – such as next day – and we may have to enter the data manually, which means we can’t automate sortation and this can cause delays.”

This can also lead to further downstream costs , such as higher contact centre call rates with parcel tracking enquiries.

7. Be prepared to flex your schedule

Sales forecasts can also help you plan your warehouse staff roster and collection schedules. You may need to consider adding additional daily pick-ups, larger semi-trailer collections or weekend timeslots.

With Christmas Day falling on a Friday this year, it’s also important to consider cut off times, and when you might transition services such as Parcel Post to Express Post.

“We find our busiest days are two days before a gift event, because people leave it until the last minute,” says Smitka. “So we have to send orders as soon as they come in and promote cut off order dates.”

“We’ve learned a great deal during the recent pandemic peak period. And we’re looking forward to working closely with our customers to help them manage the next peak,” says Bourke.

Your Australia Post account manager and service partners can discuss all these options with you, and help you optimise lodgements so they work into your operating rhythm. Because ultimately, we all want the same thing: to ensure every customer gets their holiday gifts and parcels on time.

Your account manager will be in touch soon to set up a peak planning session with you.
 

This article is provided for general information purposes only and is not intended to be specific advice for your business needs.

1 Inside Australian Online Shopping 2020 eCommerce Industry Report, May 2020
2 The new online shopper, Australia Post. Source: Parcels Market Share Survey, N=2,813 respondents over April / May 2020
3 Inside Australian Online Shopping 2020 eCommerce Industry Report, May 2020. Excludes cafes, restaurants and take away
4 Post COVID-19 lockdown retail trends predictions, Australian Retail Association 22 May 2020
5 Post COVID-19 lockdown retail trends predictions, Australian Retail Association 22 May 2020




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