Global Trade

How to tackle peak season demand like a pro

The COVID-19 pandemic only accelerated growth in e-commerce, pushing peak season demand to new heights. What can businesses do to prepare for the logistics demands of peak seasons?

Keep up with the clicks

It’s no secret that certain shopping days have almost become cultural events on par with traditional holidays. Black Friday, Cyber Monday, and New Year sales have all become crucial sales periods for retailers, with many relying on business done during these peaks to make it through the rest of the year.

In 2019, fashion and lifestyle e-commerce company Zalando announced a record-breaking 840,000 new customers during Cyber Week, and gross merchandise value growth of 32% from the previous year. In the same year, German consumers spent nearly 7 billion Euros over the Black Friday weekend and on Cyber Monday.

Other retailers – such as DIY and garden stores, or sporting and outdoor goods suppliers – hit their peaks earlier in the year, meaning these challenges aren’t limited to the fourth quarter rush in the build-up to holidays such as Christmas.

Businesses need to consider the heightened expectations of mature, e-commerce-savvy shoppers.

Beyond seasonal peaks, there are other causes of spikes in demand that impact retail logistics. Think of the increase in supply chain operations caused by new product launches and the knock-on effect on areas such as packaging . In 2020, supply problems following the launch of an eagerly awaited games console were blamed by one retailer on the larger than usual box, which put a constraint on capacity.

So, how can businesses best prepare themselves to tackle all the challenges of peaks, whether they’re seasonal or unpredicted? Here are six tips that will help you keep up with the clicks.

Best practices for peaks

What steps can you take to prepare for peak seasons and product launches:

Create and communicate a clear plan across your organization that focuses on successful execution as your peak approaches. Liaise with operations teams and galvanize them for the intense weeks ahead.
Identify additional capacity required and any potential overflow storage facilities that will be necessary. This gives you time to source additional capacity, onboard the team who will manage the overflow storage facilities, and train them on how you can deal with efficiently with all your orders. You should also take the opportunity to surge test typical peak demands before the season begins. Hold and push your volume throughput a few times to the volume that you project to manage during peak.
Review your Business Continuity Plans to make sure they’re up-to-date, ensuring all contact details and processes are accurate and ready to be deployed if needed. Take a close look at trends and demand, reviewing them against existing plans. For the review, work with three volume scenarios: optimistic, conservative, and one that is in line with your expected projections.
Organize your facility and confirm operational readiness. If your e-commerce business is supported by automation, make sure you have the spare parts needed to keep the facility operating at 100 percent.
Remind yourself of the previous year’s results and use them as a benchmark for the forthcoming season. Conduct a detailed review of successes and failures, making them visible to your team so any learnings are consistently applied across your organization.
Prepare for the increased labor demand by identifying personnel needs. Anyone who will be joining prior to the peak season should be onboarded. Make use of labor planning tools for each critical position to assess required capacity.

Peak season management – a critical challenge

Peaks are challenging because of their fleeting nature: a peak is not a constant, and it’s hard to gauge the degree of flexibility and agility your business will need (and when and where it will be needed).

Cultivating logistics capabilities that can ‘switch on and off’ as necessary is a process that takes time. A transparent pay-per-order pricing model allows you to keep costs under control even when order volumes fluctuate.

Key challenges of managing peaks

Getting the timing right

Adjusting capacity at the flip of a switch

Meeting high customer demands

Mature, e-commerce-savvy shoppers

Businesses also need to consider the heightened expectations of mature, e-commerce-savvy shoppers. For them, perks such as next day delivery is a given. If your business sells in markets across Europe, having access to a distributed network that has your stock stored closer to your customers can really make a difference in how quickly your deliveries arrive.

The pandemic caused retail trends to shift rapidly and customer expectations to grow. The most successful e-commerce businesses will make sure fulfillment is keeping pace with these developments.

When selecting a logistics partner, companies say that being able to manage the peak season is one of most important things they look for. Choosing a logistics partner who shares your desire and commitment to successfully manage peak season is the best way to make sure you keep up with the clicks.

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Published: August 2021