Due to the ongoing pandemic, this year’s Christmas shopping season once again entails quite a few uncertainties: Internationally operating retailers are well advised to optimize their own fulfillment and logistics processes at an early stage and to position themselves in the social commerce environment in order to benefit from Europeans’ increased desire to buy online. We explain how to strategically prepare for the special challenges of the pre-Christmas season.
The Christmas shopping season is approaching: After last year’s record-breaking total sales, e-commerce providers are wondering what the 2021 seasonal business in Europe will look like. Given the impact of the pandemic on supply chains and the international movement of goods, they are well advised to start preparations in good time. In addition to a possible optimization of logistics and fulfillment processes or data analysis in order to identify best sellers, but also slow sellers, the focus should be set on customers’ changed shopping habits. For foreign retailers, the growing preference for online or mobile shopping offers enormous potential, especially in the high-sales pre-Christmas period – provided they meet the requirements.
Aligning merchandise purchasing and assortment with Christmas business
After the enormous run on online sales channels in the past pre-Christmas period, companies should once again prepare for an increased demand and replenish stocks and packaging materials in good time. At the same time, it is worthwhile to think strategically about how to expand or optimize your own product range. Experience and information from previous years provide an important basis for making decisions about the product range. Those who rely on professional data management can make targeted use of the knowledge contained in the data. In addition, bestseller lists from marketplaces provide information on which gift items are purchased preferentially in which country.
Procurement should also take into account the fact that production can be interrupted or deliveries delayed on the manufacturer side due to corona requirements, renewed disease outbreaks or bottlenecks in freight traffic. Companies are therefore well advised to purchase goods with more advance notice and to rely on a preventive risk strategy. This should include, for example, local or multi-region sourcing and modular warehouse structures available at short notice.
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Strategically planning fulfillment
Well thought-out fulfillment is considered a critical success factor in cross-border trade – especially during demand peaks. Companies ensure that all processes are seamlessly integrated and provide quality and speed of delivery. A smart fulfillment strategy includes, among other things, a detailed reporting, on the basis of which companies can optimize their own inventories – with the aim of avoiding out-of-stock notifications and slow-moving items.
Companies that handle more than 5,000 to 10,000 shipments per day should consider an external fulfillment solution. After all, experienced logistics service providers have sufficient capacity to absorb increased demand and work with automated processes as well as digital tracking solutions. In addition, an automated approach is generally more cost-effective and less error-prone than manual processing in the company’s own warehouse.
Optimizing logistics processes, securing external capacities
Transit and delivery times are also highly relevant for successful Christmas sales. Marketplaces have thus set new standards in this context, which has increased Europeans’ demands for speedy delivery.
After all, the high volume of parcels already posed challenges for international retailers and their logistics service providers last Christmas season. Logistics managers should therefore investigate at an early stage how they can optimize delivery times and returns processes as well as shorten cut-off times and secure corresponding capacities from logistics service providers. For retailers with a cross-border focus, it may be a good idea to outsource cross-border fulfillment, including local warehousing, to a service provider in order to accelerate logistics processes.
Scoring points through transparent shipping communication
Ideally, the delivery of goods is accompanied by professional shipping communication. Especially when buying gifts in the run-up to Christmas, European consumers expect to be informed about delivery status changes by e-mail, text message or via a shopping app – in real time. With a strategic shipping communication, they can be encouraged to make Christmas purchases even earlier than in previous years. Potential delivery delays also seem more plausible when communicated transparently.
Strategically planning returns management
No sooner are the festive season over than the return and exchange period begins, for which it is important to have sufficient capacities. Simple return solutions for customers should be a top priority for cross-border retailers: As an important component of a successful user experience, they can increase the willingness to buy and thus significantly boost one’s own sales. The question who pays the return costs – the retailer or the customer – should be decided depending on the market, as habits vary in this context. In any case, it is important to transparently explain possible return costs prior to the purchase so as not to annoy customers.
Sustainable returns management offers opportunities to reduce avoidable returns in advance and keep the exchange rate as low as possible. It is advisable to analyze the reasons for returns, to provide customers with the best possible information through detailed product communication, and to examine the use of new technologies to optimize your own company processes. In the field of artificial intelligence and machine learning in particular, there are effective solutions for supporting consumers in their purchasing decisions and for optimizing logistics and demand forecasting.
Adapting sales channels to changing user habits
Last but not least, it pays to analyze the changing user habits in the run-up to Christmas at the very latest: Which channels do customers prefer to use for shopping today? Since the beginning of the pandemic, people have increasingly been shopping via mobile devices, so it is essential to ensure that your own online store has a responsive website design. In addition to their own web store and presences on popular marketplaces, international retailers should also focus on social commerce. Social networks such as Facebook, Instagram or TikTok have become important sales channels and are used as shopping tools for trends, especially before Christmas. Those who additionally rely on influencer cooperations can drive their online and mobile sales upwards in a targeted manner.
The 2021 Christmas season promises good opportunities for a solid increase in sales. Internationally operating companies can take advantage of the trend towards online and mobile shopping, which has gained further momentum with the pandemic. Provided they can meet the increased demand, optimize logistics processes, and provide customers with a positive customer experience through good product and shipping communication on the relevant channels.