Holiday and seasonal shopping can be the busiest and most stressful times for retailers. With a surge in product demand both in stores and online, retailers face the daunting task of preparing for peak season fulfillment and managing large volumes of orders within a short window. The 2024 peak season will introduce its own unique set of challenges that retailers must navigate.
Why peak season matters
The holiday peak season is critical for direct-to-consumer brands, with many generating around 20% of their annual sales during this period alone. Customers have high expectations, seeking an enjoyable and memorable shopping experience across all channels, whether online or in-store. Retailers who master the end-to-end shopping experience can build customer loyalty, gain repeat buyers, and boost their competitive advantage.
Missing out on peak season revenue due to supply chain deficiencies can lead to large setbacks for companies of any size. This is why it’s so important to find the right 3PL supply chain partner that can be adaptable to your changing demands. It can make the difference between having a successful, lucrative peak period, versus causing larger problems, stretching beyond the supply chain itself.
To alleviate this risk and avoid the “growing pains” of peak season fulfillment, the best strategy is to rely on an experienced supply chain partners (3PL) like Metro Supply Chain (now Metro Supply Chain) that can take away the stress of distributing your products on time.
This article explores consumer shopping trends, the specific challenges that brands will face during the 2024 holiday peak season, and how partnering with Metro Supply Chain (now Metro Supply Chain) can help you succeed during peak season and beyond.
Key consumer trends for peak season fulfillment
According to Salesforce’s 2024 Shopping Index:
- Modest sales growth: While 47% of shoppers plan to spend the same as last year and 40% plan to spend less, holiday sales growth is expected to be slower compared to 2023, which saw a 3% increase year-over-year (YoY), totaling $1.17 trillion.
- Cyber week focus: Two-thirds of shoppers are delaying major purchases until Cyber Week, anticipating the best deals and promotions during this period.
- Rising discounts: Global discount rates are expected to spike briefly in October, peaking at an average of 28% during Cyber Week. In the U.S., discounts could reach up to 30%.
- Shift to online shopping: With the growing availability of same-day delivery, 67% of shoppers plan to shop during Cyber Week. Online stores are predicted to capture 7% of in-store sales on Black Friday, leading to shorter but more intense shopping periods as more consumers opt for online purchases.
- Repeat purchases: An estimated 2 out of 5 purchases during the holiday season will come from repeat buyers.
- Loyalty programs: 63% of shoppers are making more purchases from stores that offer loyalty points, with 46% citing the ability to earn and redeem points as a top factor influencing their buying decisions, second only to price.
Partnering with a trusted 3PL
Missing out on peak season revenue due to supply chain deficiencies can lead to large setbacks for companies of any size. This is why it’s so important to find the right 3PL supply chain partner that can be adaptable to your changing demands. It can make the difference between having a successful, lucrative peak period, versus causing larger problems, stretching beyond the supply chain itself.
To alleviate this risk and avoid the “growing pains” of peak season fulfillment, the best strategy is to rely on an experienced supply chain partners (3PL) like Metro Supply Chain (now Metro Supply Cain) that can take away the stress of distributing your products on time.
Peak season fulfillment challenges and solutions
1) Peak season fulfillment volume increases & inventory overflow
Challenge: Managing the significant spike in orders during peak season can overwhelm fulfillment operations, leading to delays and dissatisfied customers. To avoid stockouts and shipping delays, many retailers increase their on-hand inventory, which requires flexible scalability, additional storage space and efficient operations.
Solution: Partnering with a 3PL that utilizes the latest technology can help manage volume fluctuations and provide real-time visibility into your supply chain. Progressive business intelligence tools allow you to better track your supply chain performance during peak season with insights such as historical trends and comparisons to SLAs. These tools enable us to measure, monitor, and optimize your operations, so you can make better, more informed decisions year after year. By monitoring your network, you can understand health trends, which is used to balance service levels and costs and improve your bottom line.
2. Adapting to multichannel shopping behaviour
Challenge: Retailers need to prioritize the growing demand by consumers to shop across multiple channels in 2024. The National Retail Federation forecasts that online and non-store sales will grow by 7%-9% year-over-year. This growth is driven by multi-channel and omni-channel strategies, with physical stores still accounting for about 70% of total retail sales.
A study by Capital One found that 73% of consumers shop across multiple channels, and retailers using three or more channels see a 251% increase in customer engagement. Shoppers are also 19.2% more likely to buy from stores offering omni-channel pick-up services.
Solution: Prioritizing a seamless omnichannel experience is crucial. From research to returns, the customer journey should be straightforward. This starts with improving fulfillment, social commerce, and customer service. Offering flexible delivery options—regarding how, where, and when orders are received—enhances customer value and competitiveness. Transparency, real-time updates, and tracking tools are essential.
Managing multichannel fulfillment is complex, but third-party logistics (3PL) providers can simplify the process. They handle warehousing, inventory management, order processing, and shipping, allowing businesses to focus on customer expectations while the 3PL manages logistics.
3. Inflation pressures and the focus on value
Challenge: Rising prices and global pressures have made consumers more cautious and discerning with their money. While they continue to shop online, their expectations are higher, and they are more deliberate about where and how they spend. Retailers and brands should prepare for more thoughtful and intentional customers who search for value in what they spend on.
Mintel’s 2024 Global Consumer Trends Report found that as “budget pressures force tighter trade-offs, consumers are becoming more realistic in their search for value as they strike a balance between quality received and cost incurred.”
Solution: Retailers that prioritize customer needs and provide exceptional service can build stronger relationships, increasing the likelihood of repeat business. Trusted companies financially outperform their peers and customers who trust a brand are 88% more likely to buy again.
To build trust, retailers can improve customer experience by working with reliable 3PL providers, ensuring efficient fulfillment, timely deliveries, and maintaining optimal inventory levels. Effective order management ensures a seamless shopping experience, fostering trust and encouraging repeat business.
Localizing inventory and Section 321 fulfillment
Many Canadian shoppers are apprehensive about buying from American brands for fear their purchase will come with high delivery costs and taxes. Your brand can help Canadians feel they are getting more value for their money through reducing duty and shipping costs by localizing inventory in Canada. This allows American brands to reach Canadian consumers more cost-effectively during peak season and leveraging Section 321 shipping can further reduce costs by allowing duty-free entry of small shipments into the U.S. Section 321 is an exemption that allows small shipments to enter the U.S. duty-free. This offers direct-to-consumer ecommerce retailers an opportunity to reduce their cost per unit through waived or refunded import duties on items that enter Canada bound for U.S. recipients, without affecting the customer’s experience.
4. Managing returns and reverse logistics
Challenge: A peak in sales inevitably results in a peak in returns. You’ll first want to ensure your return policy is clear and easy to understand, and that your customer service team is trained to ensure a smooth return experience. Poorly handled returns can harm both reputation and revenue. When returns are handled quickly and easily, you’ll see better customer satisfaction and loyalty while reducing costs and capturing valuable data about processes and quality.
Solution: Retailers should have a process in place to handle returns that avoids any disruptions to your operations. Your 3PL partner should offer end-to-end reverse logistics capabilities that can take the stress out of this additional piece of the peak season fulfillment puzzle. They can work with you to create a reverse logistics program that is seamlessly integrated with your current supply chain and logistics process. Find cost savings and operational efficiencies with a thorough inspection to determine whether your products should be reshelved, repaired, or salvaged for parts before resorting to recycling and disposal.
5. Meeting high expectations for kitting and packaging
Challenge: The importance of having aesthetically pleasing boxes and packaging for your products has grown in recent years with the rise of influencer marketing on social media platforms such as Youtube, Tik Tok, Instagram, etc. Unboxing moments get recorded or photographed and uploaded for followers to view and comment. Even beyond influencers, the general public often uploads images to their social media to share what they received as a gift during the holidays.
Solution: In some ways the appearance of the box and presentation of the product has become as important as the appearance of the product itself. Brands looking to convey a cohesive brand identity, an aspirational lifestyle, or a particular message need to design their packages with the un-boxing experience in mind. Working with an experienced 3PL with in-house value-added services such as packaging and kitting can ensure you exceed customer expectations during peak season.
Your trusted peak season fulfillment partner
Metro Supply Chain has decades of experience managing supply chains for wholesale, direct-to-consumer, and omni-channel retailers. We are committed to reducing costs, risks, and complexity through continuous improvement, business intelligence, and transparency. As a strategic partner, we provide end-to-end management of the entire customer experience, helping you stay ahead of customer expectations.
Contact our experts today to learn how we can enhance the scalability of your supply chain during peak season and throughout the year with our inventory management, strategic planning, warehousing, distribution, transportation, and post-sales logistics solutions. Our supply chain solutions ensure that retailers meet their seasonal requirements and delight customers.
