Q&A—How retailers can prepare for peak shopping season

shopping storefront mall
"Peak season is like the Super Bowl for retailers ... there is an increased amount of pressure to succeed," says Radial's Stefan Weitz.

It may be hot outside, but inside retailers are already thinking about the winter months. Summer signals the start of preparations for the peak holiday shopping season. FierceRetail spoke with Stefan Weitz, executive VP of technology services at Radial, to find out what retailers should be doing now to ensure everything is in order both online and in-store by Thanksgiving.

StefanWeitz
Stefan Weitz

FierceRetail (FR): What are some of the most common misnomers that you hear from retailers about peak shopping season?

Stefan Weitz (SW): Despite their best intentions, too often retailers underestimate the complexities associated with the successful execution of peak shopping season. Many think it’s just their normal business with a little more volume. Everything ranging from customer service to order deadlines and more are magnified during peak season. The reality is that with peak, every potential mistake is amplified tenfold. Did you miscalculate labor in your distribution center for a day? That backup in pick-and-pack often can’t be made up as volume increases throughout the season, meaning you end up with greater shipping charges to get packages to people on time or many dissatisfied customers missing their product. In order to meet demand, retailers need increased staff at fulfillment warehouses and customer service centers, additional stock and a sophisticated inventory and order management system for optimizing delivery to the consumer.

FR: When should retailers start preparing for the winter shopping season and what should they do to prepare?

SW: Peak season is always more complex than most anticipate. Peak should be a yearlong initiative, with retailers evaluating successes and failures of the season as soon as it concludes and beginning planning stages once they are able wrap their mind around what can be expected the next year. Execution typically starts soon thereafter, with technology evaluation and hiring efforts beginning during the spring and summer months. While this can vary based off the infrastructure in place, a third-party provider can help to expedite efforts allowing retailers the opportunity to focus more on inventory and less on logistics. 

FR: What can go wrong digitally during the peak shopping season?

SW: We live in an increasingly digital age, so just about every aspect of the retail process is somehow tied to digital in one way or another. Retailers need to ensure that their technology providers can scale to incredible peak demand so customers can order goods both online and in-store with the least amount of friction possible. In particular, retailers must ensure that their shipping route optimization software is as efficient as possible, as high shipping costs or long purchase-to-delivery times can result in a bad customer experience. In addition, retailers must have adequate inventory software that immediately updates, especially during a time of year when the frequency of purchases skyrockets. The last thing a customer wants is to make a purchase only to find out that the item is not available in the foreseeable future.

FR: What are the in-store challenges for this time of year?

SW: Online retail is continuing to make gains as the most popular channel for consumers. This means that brick-and-mortar locations are playing a different role. However, they are not obsolete. Brick-and-mortar today is being viewed as a disadvantage due to expenses related to stocking, staffing and renting space. Instead, independent retailers should reimagine the space, considering the infrastructure as an advantage, transforming them into fulfillment centers and showrooms. 

While this strategy is a logical next step, many stores are still navigating the technology and training necessary for execution. Making the leap from simply a retail store to a place where associates are managing pick and pack, shipping, and online order pickup is complex, but not unknown. Many retailers have successfully worked with strategic partners to make this vision a reality. 

FR: What can retailers do to attract shoppers without implementing season-long discounts?

SW: As a general rule, consumers want what they want, when they want it, and so providing the most frictionless path between a person and their goods is key. Fast shipping, cheap shipping and quicker processing will ensure that buyers receive their goods on time and with the least amount of hassle possible. But that doesn’t always mean margin-crushing fulfillment costs. For those retailers and brands with physical presences, enabling in-store pickup not only reduces costs, but also gives them a chance to engage with customers on a more regular basis. Customers are exceedingly brand loyal to companies that have provided them with a seamless experience in the past, and so catering to the customer is the easiest way to encourage further spending. Last, implementing smart loyalty and engagement programs combined with the ability to make sense of past customer purchases gives retailers a way to constantly but authentically engage throughout the year.

FR: What else do retailers need to know about the peak shopping season?

SW:
One of the most commonly held misconceptions is that peak season creates nothing but stress and anxiety. Peak season is like the Super Bowl for retailers, and just like the actual Super Bowl, there is an increased amount of pressure to succeed. However, when all is said and done, the rewards that come with successful execution far outweigh any stress that retailers may feel. Focusing on peak execution while having a recovery plan when things go wrong (because they will) is key. It’s also time to look at new concepts like longer return windows and easier returns processes through companies like Happy Returns, or the new practice of “slow-shipping,” whereby customers let retailers know that they don’t need the item immediately, which helps to smooth out the peak crush. A successful peak can put an emerging brand on the map, leading to continued recognition through the rest of the year. While peak season is often feared, in reality, it presents an opportunity for success that should be embraced.

FR: Is there anything you suspect will be different about holiday shopping this year versus last year that retailers need to be aware of?

SW: Fraud is on the increase now that the full shift to EMV has happened. We are seeing nearly a doubling of fraud attacks and if retailers don't catch them in real time, the chargebacks that hit in the first quarter could put a serious dampening on earnings in 2018. Second, Amazon’s push in to metro-level fulfillment centers means they will be able to get products to people faster than ever—meaning tapping into retailers’ brick-and-mortar assets is more critical than in years past to ensure the customer experience doesn't suffer during peak.  

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