The Corona pandemic put many brick-and-mortar retailers to the test last year. For online retail on the other hand, the lockdown period was a flywheel. Manufacturers and retailers reached record sales through their online channels.
How does your warehouse cope with a spontaneous boom?
Many product ranges, such as food, DIY and electronics, experienced an unexpected boom during the Covid-19 period and the various lockdowns. At many online retailers, the number of daily packages rose to an extent that easily surpassed any previous Christmas peaks. Many businesses were not able to keep up with the Corona boom.
Unlike the Christmas business, this time the rush came spontaneously and unexpectedly. Many retailers had to contend with stock shortages. Those who didn’t have a scalable model were doomed. With a warehouse utilization of more than 80%, processes no longer run smoothly. Every warehouse needs free movement space. If everything is filled to capacity and the same assortments are bought over and over again, people and goods will eventually get in each other’s way. Once efficient processes then quickly become inefficient and expensive, and the error rate increases.
In addition, it is difficult to recruit new staff quickly in general peak times. Temporary workers are a welcome replacement, but they have to be trained first. Fortunately, the Christmas business does not come spontaneously this year and logistics can prepare well for it.
What’s left of the increase in sales?
More sales and the Christmas boom initially bring money into the bank. But how much more effort is required as a result of the orders? How much is left over from the increase in sales in the end?
Many online retailers still cling to manual processes. As long as employees enter data in Excel lists or the retrieval of goods is done manually instead of by hand scanner, more sales do not necessarily lead to more profit. In the case of repetitive manual processes, it is worth investing in the right IT systems and automating activities.
Over the course of the year, special cases are often easily handled by means of a workaround. During the Christmas season, the sum of these special cases can quickly become a real problem. They lead to delays and also prevent the company from further growth. Simply hiring more employees when there is more turnover no longer works when the organization itself reaches its limits. Overworked employees and dissatisfied customers are the result.
An example of this: A customer calls customer support and asks where the delivery is. Unfortunately, the support employee does not have access to the tracking data and asks the key account manager. He in turn consults the warehouse. Then the customer support is informed again, who calls the customer back. A simple question keeps 3-4 employees busy for several minutes. If such inquiries accumulate, there is quickly nothing left of the sales margin.
Another example is the maintenance of product data or even inventories in Excel. Apart from the errors that can occur during copy/paste or accidental overwriting of data, an Excel list becomes a huge problem when several channels are connected. If each sales channel (online store and several marketplaces) is controlled via Excel lists, the effort increases drastically if the product data has to be changed or removed from the range.
Identify optimization potential and take action
In every company, there are such processes that can actually be optimized easily and thus save working time and costs.
The following areas should be examined first:
Product data maintenance:
To avoid manual maintenance in Excel lists or maintenance in different systems by different departments, the introduction of a PIM system for central product data management should be considered. Buyers, product managers and copywriters can each enter and manage their information on the products there. The data required for the online store and connected marketplaces can be transferred directly from the PIM system to the points of sale. Product detail data no longer needs to be merged from different systems (often manually).
Automation in the warehouse:
As the company grows, manual processes in the warehouse can quickly become a problem. Retrieval by hand and manual restocking of returns as well as credit posting inhibit speed and lead to massive bottlenecks in the warehouse. The introduction of route-optimized retrieval by hand scanner and semi-automatic returns posting can significantly reduce the stress factor in the warehouse and save unnecessary costs.
Saving costs in customer service:
As a first step, customer inquiries about products should be reduced as much as possible. After all, every customer contact reduces the margin on sales. Meaningful product images, videos on how to use a product or detailed descriptions can help here. Many customer questions are already answered. Product reviews can also serve as a data source – sometimes it is worthwhile to include supplementary aspects from the reviews directly in the product description. Informing customers early in case of delivery delays and shipment tracking help to avoid many inquiries in advance.
”Our tip: If you want to preserve your margin, manual work steps must be optimized and automated as much as possible.
Flexibility wins in the 2021 Christmas business!
This year’s Christmas business presents many online retailers with major planning difficulties. Will consumers increasingly buy online again this time, or will shopping in brick-and-mortar stores increase again at Christmas?
If you can’t plan your December sales, there’s one thing you have to be: flexible! That’s easy to say, but it’s not always easy to implement. What can manufacturers and retailers do right now to ease the logistics burden at Christmas?
Our tips for optimal preparation for the Christmas business:
- Don’t overload incoming goods: In this case, less is more: before the goods in the incoming goods department sit unbooked for weeks and take up valuable space in the warehouse, it is better to buy only as much as the warehouse can actually hold. Amazon shows the way with FBA and reduces the number of items in stock.
- Look at warehouse metrics: Sort out bum items and create space in the warehouse. Store popular items in a special location that can be picked quickly.
- Drive returns posting: Avoid starting the Christmas season with legacy issues by booking old returns before the big rush and resolve problem cases.
Our tips for the Christmas boom: Use the time now to automate manual processes as much as possible. In addition, it is essential to create capacities in the warehouse to ensure smooth process flows.
Often the internal glasses make blind for unnecessary processes and optimization possibilities are not recognized. External experts, e.g. from the digital consultancy ecom consulting, quickly help to identify optimization potential and, with the help of suitable systems, to achieve extensive automation of processes in order to reach the fulfillment. In the end, this not only saves time and money, but also ensures satisfied employees and customers!