Preparing Ecommerce for the "New" Holidays

October 17, 2020 4 min read

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Sometimes the holidays aren’t quite “the most wonderful time of the year.” According to one study, the holiday season stresses out 88 percent of Americans. For ecommerce companies, this is even more true. Every year, store owners spend months preparing for the fourth quarter, and few ever feel like they’re fully prepared for the wave of sales — and the headaches — that come with it.

This rings true this year more than ever, with COVID-19 pushing more and more retail volume online. Data shows ecommerce penetration skyrocketed from 16 percent in 2019 to 27 percent, year-to-date, in 2020. This is a direct result of the pandemic and the full extent of this impact remains to be seen in the holiday season.

So how can ecommerce store owners prepare for what looks to be an avalanche while controlling costs, and more importantly, maintaining their sanity? The truth is, from small mom-and-pop stores all the way to Fortune 500 companies, nobody knows what to expect this year, but here are some ways you can use what little time is left to prepare.

Optimize your shipping

Many small ecommerce companies don’t know what shipping options are available to them. All three of the major parcel shipping companies — USPS, FedEx and UPS — have enacted holiday surcharges for the first time ever, and store owners will feel pressured to absorb some of that cost and not pass it on to customers due to heavy competition.

But there are more than three options out there for parcel shipping. Consolidation services often provide a tradeoff between speed and cost, giving stores a good opportunity to maintain “free shipping” options while still offering more premium, faster options. Consolidation works by collecting packages and mail, handling the sorting through a third party company, and then passing it to the Post Office closer to the customer. By making USPS do less of the work, they’re able to secure better rates and lower the cost.

Packaging is also a place to explore better options. Are your products suitable for padded mailers or do they require a box? Packaging has become more complicated and branded, often being much more complicated than simple mailer boxes. Is your packaging easy and fast for fulfillment employees to assemble? If not, explore a redesign to save time and labor expense.

Rethink customer service

Customer service is unfortunately often thought of as an expense and many businesses overlook the branding power and revenue opportunity of directly interacting with customers. Often it’s the only interaction your customers will have beyond the purchase itself, so it needs to be meaningful.

Developing brand-focused interactions for your customer service team helps spread positive goodwill about your brand and has quantifiable results. Direct reductions of refunds, as well as upsell opportunities, are created through positive customer experiences.

Don’t be afraid of multichannel customer service. Email and social media are great, but many customers still prefer to have billing and returns handled by phone. It also can present a more “human” feel by putting a voice to your brand.

Make sure to measure KPIs ranging from direct refunds and cancellations of subscriptions to response times of emails and phone calls to one-touch interactions with customers. The better experience a customer has, the more likely they are to help evangelize your brand for you. Think about it — would you recommend a company that makes you sit on hold for an hour or one that picks up immediately and resolves your issue in one call?

Manage inventory like the pros

While dropshipping has become a popular method for many stores, COVID-19 exposed massive risks in this style of ecommerce business. The lack of air cargo capacity slowed international mail almost to a halt, and it still hasn’t come close to recovering. Epacket and other international mail-based shipping methods typically rely on passenger airplanes for transport from countries like China to the United States. With passenger airlines still at reduced capacity, this means slower or even immobile shipments.

Projecting your inventory needs can be difficult, but can often increase your margins and improve customer relations. Bulk purchases reduce per-unit costs and reduce freight costs. Ocean freight can be less than 10 percent the cost of a similar shipment for air.

Customer expectations are higher than ever, but with adjustments, ecommerce retailers can compete, and even thrive, in this new environment.

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This article is from Entrepreneur.com