The end of the financial year marks a busy period for most ecommerce and omni-channel retailers. As we emerge from this period, it’s important that small-medium businesses (SMEs) maintain momentum by taking the opportunity to forecast and prepare for the next sales peak.
While many SMEs may find themselves busy all year round, the non-peak period – now until the spring and summer sales season – is the best time to create or revisit your business strategy, particularly when it comes to inventory management, order fulfilment and delivery.
Here are a couple of ways retailers can take advantage of the downtime to get their ducks in a row and build a winning strategy, to ultimately keep customers, attract new ones and drive sales.
Forecast, forecast, forecast
To build a clear strategy, retailers should start with demand forecasting. Demand forecasting enables retailers to estimate their stores’ sales and revenue for a specific period in the future, using historical sales data, but also other factors such as customer feedback or economic trends.
Demand forecasting is critical to reduce risks and make the right business decisions, such as how many staff on the shop floor, how much inventory of each product, how often they should restock specific products. By forecasting demand, retailers can also prepare their supply chain and inventory, to prevent excessive inventory that hursts cash flow and increases storage costs.
To store or not to store?
Once this forecast has been created, retailers can calculate storage requirements. During peak sales periods, renting additional warehouse space can be a quick and easy solution. However, retailers often find that warehouses are underutilised during regular periods and experience over capacity during peak periods. During the off-season, unused space is a sunk cost to the business.
Renting additional warehouse space can also introduce resourcing and management challenges such as staff supervision, additional fit-out costs and duplication of overhead expenses such as electricity. At the same time, with demand for industrial and logistics property outpacing supply and rents continuing to climb, it may be difficult for retailers to find available warehouse space.
When planning, retailers should consider outsourcing their warehousing and order fulfilment requirements to a 3PL provider. 3PL providers can provide online retailers with access to the latest fulfilment technology, a scalable solution with existing infrastructure that meets demands every time and enables the business to share cost and execution risks with logistic experts.
Plan for omnichannel online fulfilment
Given the increasing costs of omni-channel order fulfilment, retailers are faced with challenging decisions in order to improve delivery speeds profitably. Should they continue to build, should they partner or can technology help unlock value where infrastructure falls short? To meet consumer demands for flexible and accelerated delivery, retailers should assess their fulfilment models.
To improve their omni-channel order fulfilment process, many small retailers may need to consider outsourcing their fulfilment, inventory management and warehousing needs. Using a 3PL provider means they don’t need to rent warehouse space and equipment, hire additional staff, invest in technology or handle return logistics, and instead focus on their products and customer services.
Set your staffing strategy
Attracting and retaining staff is one of the most pressing challenges facing online retailers today. According to the Australian Retail Association, 84% of Australian retailers are finding it significantly harder to recruit new team members in 2022 than the previous year. With the busy summer sales period approaching, now is the best time to assess and plan for your hiring needs.
This could include partnering with labour hire agencies, who are great at providing seasonal staff during peak retail periods, or advertising through industry associations. Online retailers will also need to consider the costs and resources required to manage an increased workforce, which could include investment for onboarding and training, and increased hourly rates for seasonal staff.
The future of the e-commerce calendar
E-commerce sales show no signs of slowing down, which means that small online retailers need to be on top of their game and use the downtime wisely to get ahead. By assessing demand forecasts, storage and staff requirements, and order fulfilment strategies, small retainer and ecommerce businesses can put themselves in the best position for success during the next big sales period.
Leigh Williams is founder and managing director for eStore Logistics.