BALANCING FULFILLMENT & DELIGHTING CUSTOMERS WITH THE RETURNS PROCESS

‘ T I S T H E

F O R

Fulfillment

Tis’ the Season for FulfillmentA Retailer’s Guide to Surviving the Chaotic Holiday Season

temando.com

Holidays are meant to be a time for reflection and relaxation, but in the retail world it is often the busiest trading period. Seasonal campaigns that were carefully planned months in advance come to life during the holidays, as retailers compete fiercely for the attention of shoppers who are spoilt for choice at this time, and uncompromising in their demand for the best deals in town. As a result, retailers often revert to price slashing to remain competitive without considering other ways it can provide customers value.

With the onset of eCommerce, fulfillment has increasingly become an integral piece of retail success. No longer do most merchants rely solely on walk-in customers in physical stores, customers today are coming in anytime, anywhere and can be virtually anybody in the world. This paradigm shift presents a new set of logistical challenges, where legacy processes or poorly designed fulfillment workflows result in frustrated employees, high costs and wasted resources that could be dedicated to other parts of the business. More importantly, gaps and inconsistencies in fulfillment affect customer loyalty. With customer acquisition being six times more expensive than retention, it’s not only a red face that retailers have to deal with when unsatisfied customers lash out. The holiday season is therefore an opportune time for retailers to nurture existing customers while attracting new ones.

To appreciate the impact that fulfillment has on retail operations, we asked retailers in four major countries (United States, United Kingdom, France and Australia) how many customer deliveries were made in a standard week. The largest group of retailers informed us that they make an average of 21 to 100 deliveries weekly - that works out to be anywhere from 1092 to 5200 packages per year, but that is a conservative amount when you consider that some retailers are sending over 100,000 deliveries a week, amounting to over five million packages a year! As for small retailers who are not accustomed to sending that many deliveries, the holidays are particularly tough to manage with limited staff, resources, and carrier relationships to carry them through. It’s no wonder that mistakes are made when business picks up over the holidays, with so much merchandise to pick, pack, send and track; retailers of all sizes are under pressure to literally deliver.

The Holy Grail of Business

In this eBook, we present:“As the 2015 holiday season has demonstrated, with an increase in e-commerce comes an increase in logistical challenges.”

- RetailDIVE

Tis’ the Season for FulfillmentA Retailer’s Guide to Surviving the Chaotic Holiday Season

COMMON RETAIL CHALLENGES ASSOCIATED WITH FULFILLMENT

HOW TO RETAIN CUSTOMERS DURING AND AFTER THE HOLIDAYS

TOP TIPS FROM THE INDUSTRY, ‘THE 12 WAYS OF RETAIL’

Retail Readiness Over The Holidays

temando.comTis’ the Season for FulfillmentA Retailer’s Guide to Surviving the Chaotic Holiday Season

27%

29%

24%

11%

5%3% 2%

3% 13% 29% 33% 23%

36% 20%

34% 22%

22% 22%

29%

30%

31%

13%

12%

11%3%

2%

2%

UNPREPARED

ABILITY TO MEET CUSTOMER DEMANDS WITH MULTIPLE SHIPPING OPTIONS

ABILITY TO RESPOND TO SHIPPING DELAYS AND UNCERTAINTY

RETURN PROCEDURES TO MEET DEMAND AND CUSTOMER EXPECTATIONS

BACK END LOGISTICS

SOMEWHAT UNPREPARED

NEUTRAL SOMEWHAT PREPARED

WELL PREPARED

While many retailers feel prepared for fulfillment activity during the holiday season, only about a fifth are confident in responding to shipping delays, and meeting customer demands for multiple shipping options, returns procedures, and back end logistics. Over 40% of retailers admitted that they are not prepared to manage demands over the holiday season, with responses ranging from feeling undecided to being completely unprepared. A third of retailers said they are somewhat prepared, indicating a self-awareness that more needs to be done to improve their fulfillment processes.

Despite the challenges that retailers face when it comes to fulfillment, many consider it as a necessary evil. To remain competitive, more retailers are guaranteeing free express shipping over the holidays to entice last-minute shoppers, with American shoppers even enjoying Free Shipping Day on December 18. However, while these deals certainly benefit shoppers, it comes at a high cost for retailers who now have to write shipping off as “a loss leader—the e-tailing equivalent of selling milk below cost to increase grocery-store traffic.” Unless you are a juggernaut fulfillment innovator like Amazon, it is likely that the free and/or express shipping that you are paying for to attract customers is cutting significantly into your margin. To avoid being crippled from absorbing the growing cost of shipping, retailers need to adapt their fulfillment infrastructure to the changing environment, or risk suffering huge losses.

“Since shipping costs rank among the top reasons for shopping cart abandonment, free or very inexpensive shipping is a must.”

- Inc.

HOW MANY SHIPMENTS TO CUSTOMERS DO YOU DELIVER PER WEEK?

HOW WELL PREPARED ARE YOU FOR EACH OF THE FOLLOWING THIS HOLIDAY SEASON?

5 - 20 21 - 100

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“Not only are online shoppers looking for hassle-free returns, pre-paid labels and extended return periods, they are now demanding online access to initiate and track returns along with follow-up confirmation emails of return credit.”

- CIO.com

Tis’ the Season for FulfillmentA Retailer’s Guide to Surviving the Chaotic Holiday Season

temando.com

Retailers Bear Seasonal BruntThe struggle that the retail industry faces when it comes to the holiday season is well documented. Throngs of customers descend upon your physical or virtual store, often with requests such as urgent deliveries or stock availability of popular merchandise. Another common retail woe – frazzled customers requesting for exchanges or replacements in a short, unnegotiable amount of time - makes holidays an expensive race to the end as retailers find themselves bearing the brunt of these seasonal expectations to keep their customers happy. On top of this, retailers must ensure they have complete visibility of inventory, prepare their stores for seasonal promotions, align team and customer communications across all channels, and more. These issues are exacerbated with eCommerce retailers who will see this hectic period of seasonal activity continue on long after the tinsel is put away, with over 30% of online purchases returned post-holiday.

However, the cost of shipping is not the only frontier that retailers are competing against with one another, it is but one element of the fulfillment process. To find out which other areas in the fulfillment journey retailers struggled with, we asked retailers to specify their common challenges. Unsurprisingly, a third of retailers struggled with high courier rates, while a quarter of retailers were challenged by their inability to meet customer expectations. A tenth of retailers recognised that they were not making the best use of technology to optimise their eCommerce shipping operations, while close to a fifth singled out manual processes as their largest pain point. With retailers being kept busy through the holidays, you can imagine how these interlinked challenges can multiply and get out of hand quickly.

While solutions to address many of these issues already exist, some retailers may choose to maintain the status quo and grit their teeth through the busy holiday season. However, doing so is short-sighted, and these retailers risk losing brand credibility, customer trust and loyalty, disgruntled employees, and to top it off, they will also be vulnerable to competition. However, change can be easy with the right technology stack - look out for solutions that complement your existing infrastructure, and reap the benefits of dramatically improved fulfillment workflows no matter how busy or big your business gets.

WHAT ARE THE MAIN DIFFICULTIES YOU ENCOUNTER THROUGHOUT YOUR ECOMMERCE SHIPPING OPERATIONS?

33%

25%

22%

16%

16%

16%

13%

13%

13%

13%

11%

9%

PAYING MULTIPLE SUPPLIERS

ENABLING SHIP FROM STORE

INEFFICIENT SUPPLY CHAIN

INEFFICIENT WAREHOUSE MANAGEMENT

TECHNOLOGY PLATFORMS NOT COMPATIBLE

LACK OF A SINGLE INTEGRATED FULFILLMENT PLATFORM

COURIER RATES TOO HIGH

MANUAL PROCESSES/DATA ENTRY

MEETING CUSTOMER EXPECTATIONS

OBTAINING RATES FROM COURIERS

LACK OF CONSISTENCY BETWEEN COURIERS

DIFFICULTY DELIVERING GOODS OVERSEAS

“…shipping costs are a new front in price wars.”

- The Wall Street Journal

DO YOU KNOW THAT TEMANDO CONNECTS SEAMLESSLY WITH MAGENTO, SHOPIFY,

WOOCOMMERCE, AND MORE?

“Today, packages need to be delivered faster and cheaper than ever, and the holiday peak season brings even greater expectations.”

- Multichannel Merchant

temando.comTis’ the Season for FulfillmentA Retailer’s Guide to Surviving the Chaotic Holiday Season

temando.com

“Retailers that can’t afford to invest in alternative shipping options are offering consumers more fulfillment options using what many of them do have — brick-and-mortar stores. Buying online and picking up in-store, also called click and collect, made up about 30% of e-commerce sales…”

- The New Retail report by BI Intelligence

“…more shoppers (103 million) went online than to stores (102 million) over the Thanksgiving/Black Friday weekend.”

- National Retail Federation, via FORTUNE

Online Shopping Set to RiseBefore bringing on board any solution providers, it is important for retailers to have a clear view of consumer intent to help make an informed decision on which and what technology to invest in. To find out if retailers can expect the same level of shopper activity over the next holiday season, we asked consumers if their shopping habits will change in both virtual and physical stores this year compared to last.

Although retailers can expect lower traction in physical stores compared to online stores, shoppers from both segments have similar shopping habits which reinforce the need for a fulfillment strategy that is aligned across all channels. For omnichannel retailers, consistency in the post-purchase customer journey is ever more important. Having a transparent view of stock availability in warehouses and local stores, a selection of courier options alongside a choice to click and collect, and automated updates to customers at all times will go a long way in earning the trust (and dollars) of new and return customers.

WANT TO WIN OVER CUSTOMERS? LET RETAILERS TELL YOU HOW WITH TEMANDO

T H E

W A Y S O F

RetailShopify advises retailers to take note of key dates of holidays, as well as non-official holidays traditionally known for seasonal sales well in advance. Remember that dates and occasions do vary from country to country.

In the spirit of giving, we’ve collected 12 industry tips that retailers can use to prepare for the holiday season:

We hope this e-book gives you joy, and shines a light on how you can better prepare for the busy seasonal sales period ahead.

Contact us to discuss how Temando can help improve your approach to fulfillment, or request a demo to experience the magic of streamlined fulfillment.

Get creative like Juicy Couture by letting shoppers know that you have pre-packaged boxed gifts that are ready to go under the tree, so they have more time for toasting, not wrapping.

Walmart’s founder, Sam Walton once said, “loosen up, and everybody around you will loosen up.” Make fulfillment easy to execute in an efficient manner, and see how this impacts your team’s attitude towards your customers.

Shoppers have a limited timeframe for how long they’re willing to wait for

purchases to arrive, according to UPS, so over-communicate any delivery updates and changes to customers to manage their expectations and avoid disappointments.

Having sufficient stock without over ordering is a fine balance, according to

Vend, so forecast demand based on sales from last year and the last few months to prevent inventory drain.

Sending a campaign with holiday shipping policies, important order-by dates, and shipping information ahead of the festivities will help shoppers get better organized,

MailChimp advises.

Ensure merchandise is in suitably sized packaging and best-fit box types to save

time like Staples, and do some good to the environment.

Signal recognises that most holiday retail sales are now influenced by digital channels, so an infrastructure that supports an omnichannel presence on both the front and back end will create a seamless, stress-free experience for shoppers.

Curating your shopper’s online experience based on what they like with a data-driven strategy can be the difference between

‘buy’ or ‘bye’, according to Marketing Land.

Provide shoppers with a great fulfillment experience with delivery choices,

such as the ones singled out by Bain &

Company: free shipping, express shipping, crowdsourced last-mile deliveries and ship to store

Shop.org has found that free shipping is a higher priority compared to express shipping for most consumers even through the holidays, so look for smart ways that you can include it as part of your marketing plan by streamlining other parts of your fulfillment process.

Emotional intelligence expert and

co-founder of TalentSmart, Dr Travis

Bradberry suggests that successful people reframe their perspective to stay calm. This advice can be adapted to retailers who are stressed during the holidays, remember: every problem is an opportunity to be better.

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Plan Ahead

Jumpstart Joy

Simplify Processes

Track

progress

Stock Up

Speak Up

Pack smart

Align Channels

Get Personal

Give Choices

Deliver free

Stay calm

Tis’ the Season for FulfillmentA Retailer’s Guide to Surviving the Chaotic Holiday Season

temando.com

temando.comTis’ the Season for FulfillmentA Retailer’s Guide to Surviving the Chaotic Holiday Season

Intelligent Shipping for the Future of Commerce.Our intelligent platform is working with some of the world’s largest brands to overcome the challenges of shipping in commerce.

The award-winning software integrates with today’s business systems and streamlines the entire multi-carrier fulfillment process from the shopping cart to the customer’s door (and all the processes in between!)

Create shipping experiences your customers will love and simplify processes with powerful, multi-carrier fulfillment.

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sales@temando.com

t: +61 2 8405 0999 (AU) t: +33 1 55 69 41 83 (FR)t: 1-844-678-9100 (US) t: +44 7766 116 765 (UK)