E-commerce

Is peak season canceled for e-commerce this year?

The evolution of peak holiday shopping has been a roller coaster.

Photo by istock.com

November 11, 2022 | Tobias Buxhoidt

The evolution of peak holiday shopping has been a roller coaster. Retailers were under prepared for the rush in 2020 during the pandemic and the increased e-commerce sales ran straight into supply chain issues. Betting on post-COVID purchasing trends remaining the same, retailers continued producing inventory at a rapid rate but with inflation hitting an all-time high, consumers shifted their spending to focus on the essentials, causing some brands to miss their projected earnings. With the holiday season upon us, retailers are hoping to capitalize on end-of-year shopping to push revenue into the black.

Address pain points before they happen

The supply chain suffered serious disruption throughout the 2020 peak season, and the effects lingered into 2021. Even today, the supply chain still hasn't caught up, and the result for retailers during peak season creates major pain points for customers. 58% of consumers report they would stop buying from a brand after one to three supply chain delays and/or disruptions. It is vital for brands to proactively address concerns — whether that be shipping delays, supply chain challenges, or inventory shortages. When it comes to holiday shopping, getting packages on time is of utmost importance. Communication is key to keep your customers in the loop on when their packages will arrive and address delays as soon as they arise. With many retailers short-staffed ahead of the holiday season due to layoffs and budget cuts, proactive communication with customers can decrease the number of incoming inquiries and customer service requests, freeing up teams to deal with more complex issues while avoiding burnout and fatigue.

Personalize customer communication

Whether an item is out of stock or there is a shipping delay, retailers can personalize communications with customers with real-time updates. By creating shoppable touchpoints to customers throughout the post-purchase experience, retailers are able to leverage potential "bad" news into an opportunity. Whether it be a popular item out of stock due to high demand or a delay that may mean a package won't be delivered by a holiday — retailers can offer alternative options to keep customers engaged with proactive solutions. Research shows 56% of shoppers feel that the post-purchase stage is the most emotional part of the shopping journey. To create a meaningful relationship with customers and address this emotional need, companies can implement personalized communications after their customers have purchased a product and/or service.

Investing in returns

Last year, post-holiday returns averaged 16.6%, adding up to more than $761 billions of merchandise that winds up back at warehouses. For many retailers that are already struggling with excess inventory and sales falling due to inflation, returns are an added financial stressor — both in the form of unsold inventory plus the additional expenses for return shipping and processing. It comes as no surprise that retailers are looking for ways to reduce costs related to returns.

Returns are inevitable — especially post-holiday rush — and ignoring it as part of your overall strategy is short-sided. Research shows that consumers want a simple, clear process if they need to return something, and developing a robust post-purchase experience will ensure customer loyalty. Retailers should implement a clear return policy — one without needing to print multiple forms or return labels. Once the package is en route back to the retailer, personalized updates on the progress of the return is crucial to reducing customer anxiety. Customers want their money back and sharing the progress of the return as well as refund processing times is a crucial component of the customer experience. Implementing a returns management strategy platform also reduces 'Where Is My Return' inquires, decreasing calls to customer support staff about returns. Customers prefer to initiate returns on their own rather than having to call customer service to do so, which in turn, also frees time for customer support teams to dive into more complex issues.

Companies can use a returns strategy as an opportunity to engage with customers. By leveraging personalized drop-off reminders, delay alerts, delivery success notifications and refund notifications, customers have visibility throughout the process. These notifications are opportunities to perfect an end customer experience. Further personalizing the experience with targeted offers or alternate product suggestions, will turn returns into profitable transactions and long-term customer retention strategies.

Tobias Buxhoidt is co-founder and CEO of parcelLab