How E-Commerce Companies Cope with the Holiday Shopping Frenzy
Online shoppers, especially American ones, are particularly active during the holiday season. This year’s holiday shopping season has already eclipsed the shopping spree seen in 2017. Buying from e-commerce stores is becoming more and more popular with consumers as they become used to making purchases online on their desktops or mobile devices. Many people find online shopping to be more convenient, faster, and often cheaper when compared with traditional shopping in a store or mall. So far, e-commerce companies are generally meeting or exceeding their customer expectations, but not without a lot of forethought into their supply chains. Here are some stats on the extent of e-commerce sales in the U.S. over the holiday season:
Holiday E-Commerce Sales Facts
- • Total U.S. holiday sales online hit $123.73 billion in 2018, up 16.6% YoY
- • Amazon accounts for 49% of all online shopping in the United States
- • Shoppers spent:
- • $3.7 billion on Thanksgiving Day, up 27.9% YoY
- • $6.2 billion on Black Friday up 23.6% YoY
- • $7.9 billion on Cyber Monday up 19.3% YoY
- • Shopify
- • Mobile device sales overtook desktop sales in 2016 and continue to grow
- • Retailers sent over 7.6 billion emails over Black Friday and Cyber Monday
- • The top category for holiday shopping online was apparel with 1.42M sales
The “Amazon Effect”
Some are blaming the growth of e-commerce for the demise of large retailers like Sears and Toys ‘R Us. Many brick and mortar stores failed to adapt to changing customer expectations and embrace supply chains powered by technology. Others, like Walmart and Target, have jumped on the e-commerce bandwagon and are mirroring successful trends set by e-commerce giant Amazon such as free shipping and fast delivery. The trend of fast delivery for free is often referred to as the “Amazon Effect” and has completely revolutionized customer expectations. However, offering expedited shipping as a standard feature for free is no mean feat for any company. To do so, e-commerce companies can optimize their supply chains with the help of technology to reduce wasted costs and speed up delivery times. This is essential for companies trying to cope with the holiday shopping frenzy.
Even without a physical storefront, most e-commerce stores still sell a physical product that requires warehousing space. Most companies choose to pool their inbound orders at a single warehouse location before sorting and shipping individual orders out to customers. Traditional warehousing with 100% manual picking and little-to-no automation, however, can be slow and add to order processing times. A two-day order processing time isn’t viable if the entire shipping process is expected to last only two short days. To speed up selection and get orders out the dock door, especially during the seasonal spike in sales, many companies are turning to technology.
Check out this video to see how one modern grocery warehouse uses robots to pick individual orders for customers:
Receiving inbound orders on time and making sure there is a truck to take customer orders to their end destination can be something of a challenge without technology too. Dock Schedulers are helping companies optimize their dock operations and ensure there is always enough labor available to properly handle orders. With Dock Scheduler technology, external partners can easily request and view appointment times at the warehouse in real-time, so holiday orders aren’t delayed because there wasn’t a truck to pick them up.
In order for e-commerce companies to provide expedited shipping at little-to-no cost to their customers, they need to find the most efficient, least expensive rate for every shipment. Instead of rating and booking with only one carrier over phone or email, companies can easily leverage a wide network of carriers when they use a cloud-based transportation management system (TMS). With a TMS, companies can compare all their carriers’ rates side-by-side and select the one with the service level and price to fit the need. This ensures they are saving as much money as possible while still meeting customer expectations.
TMSs also provide invaluable visibility to orders down to the SKU level. This not only means that freight spend can be calculated more effectively, it also means that e-commerce companies can give their customers visibility to the status of their orders in real-time. Impatient holiday shoppers who are now accustomed to being able to track and trace their orders are more likely to be repeat customers and to self-serve from the company’s site, rather than tying up customer service phone lines asking where their orders are. With this level of visibility, companies can report on their carrier’s KPIs and leverage these analytics to improve carrier behavior and make strategic changes.
Surviving the Holidays with Technology
The 2018 holiday shopping frenzy is certainly putting the pressure on e-commerce companies trying to keep up with customer expectations. To cope with the increased pressure, companies can use technology to streamline operations in their warehouses and on the road. Staying informed of new technologies and strategically implementing them as needed will speed up companies’ supply chains and reduce waste, resulting in more profitable bottom lines and happier customers!