Nishith Rastogi is a Founder & CEO of Locus, a leading-edge technology company helping 300+ global enterprises gain excellence in logistics.
Black Friday is right around the corner, on November 24 to be precise, marking the start of the holiday shopping season in the United States.
It is no surprise that the busiest and the most challenging time of year for shippers is the holidays. According to Adobe Analytics, online sales in the United States hit $9.12 billion on Black Friday in 2022. It is safe to say that such a volume of orders would be overwhelming to fulfill.
Let’s get into what these challenges are and how to resolve them for shippers to deliver on time, improve customer experience and increase revenue.
Unpacking The Black Friday Frenzy
• In-Store Chaos: It is no surprise that during deals, customers rush to the nearest retailer to buy their favorite item from off the shelves. However, during Black Friday, this manifests in the common trope of people fighting each other for the spoils of war—the products that will make the holidays memorable for themselves or their loved ones.
According to the National Retail Federation, in 2022, 72.9 million consumers shopped in-store. However, post-Covid-19, long lines in front of top retailers like Gamestop, Best Buy, Target, Walmart and others have dwindled, and so have the number of stores across the country. The reason is a shift to online shopping. Retailers should look to fully utilize the online space to reduce this chaos and prevent them from moving to other retailers.
• Delayed Delivery: According to Baymard, 24% of Americans abandon shopping carts due to long delivery times. If this isn’t concerning enough, another study shows that 69% of customers switch brands if their order isn’t delivered within two days of the estimated date. Shippers’ priority should involve optimizing their routing operations to mitigate this challenge.
• Capacity Management: As mentioned, over $9 billion worth of goods were sold online in 2022, and the volume of goods to hit that number is very high. Legacy systems like spreadsheets and emails aren’t built to coordinate the fulfillment of these huge numbers seamlessly and conveniently for customers. Due to this, shippers usually drop the orders, even though they have inventory to cater to the demand, thereby losing out on business and customer trust.
• Subpar Carrier Partners: Third-party carriers are critical partners for shippers who can’t make it work with just captive fleets. Large retailers usually partner with courier express parcel services (CEPs) and third-party logistics services (3PLs) like UPS, FedEx, TForce Freight and many others to ensure the demand is met. However, not gauging the delivery partners and other vital parameters like cost and service levels can have a negative effect on delivery.
One way forward would be to find a business and technology strategy that suits the needs of every shipper.
Navigating The Surge: Innovative Strategies For Black Friday Demand
• Omnichannel Strategy: In today’s dynamic business landscape, leveraging all forms of fulfillment is the most obvious and logical route for shippers. The numbers we looked at earlier show that neither shutting down physical stores nor sticking to only brick-and-mortar is advisable. Shippers should embrace omnichannel to build up revenue, avoid chaos at stores and maintain customer loyalty.
• Route Optimization: Optimizing your routing operations is one of the key factors to making faster deliveries and adhering to SLAs. However, with real-world constraints like traffic, roadblocks, weather and more, delivery vehicles often spend more time on the road without delivering orders and instead consume fuel and emit pollution.
By integrating supply chain technologies featuring dynamic routing capabilities, shippers can overcome on-ground obstacles by taking into account various real-world constraints. This enables them to offer drivers a cost-effective and SLA-friendly route.
• Optimized Delivery Solution: Retailers often miss out on revenue opportunities due to the inability to accommodate huge volumes of orders during Black Friday. Upgrading capacity management operations by implementing AI-driven solutions can ensure that there are enough drivers to handle the most demanding of delivery deadlines.
They do this by automatically allocating orders to available drivers, considering factors such as driver sick days, holidays and seasonal demand, all of which are preplanned by fleets using historical data. Data-driven routing is then employed to ensure timely deliveries during holiday seasons while efficiently managing the increased load.
• Carrier Management Optimization: With a revenue of $9 billion just during Black Friday, shippers need to have a large captive fleet to cater to these demands. However, even industry titans outsource their deliveries to delivery partners. Choosing a carrier partner strictly based on brand presence wouldn’t be advisable for shippers; even a big carrier might not fit the need.
By integrating an intelligent carrier management system into your supply chain solution, you can efficiently select carriers based on SLA, cost, distance, geography and other essential criteria. This automated order assignment enhances delivery performance, minimizes errors and costs and ensures a consistent branded delivery experience for both in-house and outsourced orders, all while maintaining transparency in your supply chain operations.
• Track And Trace: By augmenting their technical capabilities for the supply chain, shippers can provide an end-to-end tracking feature for the end customers. This can let them know when the order is out for delivery and send notifications as soon as the order enters a new fulfillment stage post-order placement, assuring customers their gifts/orders are the company’s top priority. Shippers with an automated dispatching solution can also track their fleet in real time and reroute to avoid SLA breaches.
Holiday season shipping is crucial, and the numbers above reflect that. Customers across the country will be shopping during the upcoming holiday season for their loved ones, and any hassles they may face during this time will certainly sway their future purchase decisions, thereby impacting shippers in the long run.
Adopting an omnichannel approach with cutting-edge supply chain solutions can create memorable consumer experiences that reinforce trust in your business during Black Friday in 2023 and the rest of the holiday season.
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