Get ready for the ‘IOU Christmas’
This is what happens when the shipping container crisis meets Shipageddon. We are all experiencing the supply chain crisis together — delays at ports, skyrocketing container costs and supplier delays. What should retailers do in the face of all these challenges?
While the big decisions like merchandise, pricing and promotions are all done, there are last-minute adjustments that retailers can make as we head into the holiday season.
First, start with communication. If you have reduced inventory and your conversion rate is down, talk to your customers about it. Don’t pretend they won’t notice.
Second, pay close attention to your delivery SLAs by carrier and service level. Why? Because while Amazon.com, FedEx, Target, Kohl’s and Walmart are recruiting over half a million workers combined for holiday, it’s not likely they will be able to hire at these levels in time — meaning your delivery times are going to get worse.
In FedEx’s recent earnings call, it was announced that the company is routing over 600,000 packages a day around certain nodes in its network due to staffing challenges. And that’s before the holiday season.
If you are promising a delivery date to your consumer today, add a few more notifications throughout the journey to provide visibility and reduce your customer service workload. Do not let two days go by without a new update.
Third, inventory alerts on out-of-stock products and brands are now table stakes. Allow your consumers to tell you they are looking for items you may not have, and let them know via email or SMS immediately when these return to stock. Since these challenges are affecting everyone, your best bet is to make it easier for your consumers than your competition does.
Fourth, tweak your product pages to show data freshness. In an environment where scarcity is common, the retailers that communicate inventory positions with accuracy will be the winners. Every brand should state when inventory data was last refreshed on their product pages. Tell a story about it.
Finally, consider offering giftable subscriptions. One way to smooth out supply chain demand is to convert one big purchase at Christmas for a friend and spread it out into four smaller quarterly gifts over the course of next year.
In summary, the two big areas I would think about are communication, along with establishing a longer-term relationship with your consumer beyond this holiday. How about you?
DISCUSSION QUESTIONS: How well prepared are retailers to deal with the prospects of an IOU Christmas? What recommendations in the article do you think have particular merit, and are there any you would add?