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Put together e-commerce for the "new" holidays

17, 2020

4 min read

The opinions expressed by the entrepreneur's contributors are their own.

Sometimes the holidays are not quite "the best time of the year". According to one study, the vacation season weighs on 88 percent of Americans. This is even more true for e-commerce companies. Every year, store owners spend months preparing for the fourth quarter, and few ever feel fully prepared for the surge in sales and headaches that comes with it.

This is more true than ever this year as COVID-19 drives ever more online retail volumes. The data shows that e-commerce penetration has increased from 16 percent in 2019 to 27 percent since the beginning of 2020. This is a direct consequence of the pandemic, and the full extent of this impact remains to be seen during the holiday season.

How can ecommerce store owners prepare for an avalanche while controlling costs and most importantly, keeping their sanity? The truth is, from small mom and pop stores to Fortune 500 companies, nobody knows what to expect this year, but here are some ways you can use the remaining time to prepare.

Related: What's Next for Ecommerce and Digital Retail?

Optimize your shipping

Many small ecommerce businesses don't know what shipping options are available to them. All three major package shipping companies – USPS, FedEx, and UPS – have introduced vacation surcharges for the first time, and shopkeepers will feel pressured to take some of these costs and not pass them on to customers due to fierce competition.

However, there are more than three options for parcel shipping. Often times, consolidation services offer a tradeoff between speed and cost, and provide a great way for stores to keep "free shipping" options while offering more premium and faster options. During consolidation, parcels and mail are collected, sorting is handled by a third-party company and then forwarded to Swiss Post closer to the customer. By doing less work, USPS can get better prices and lower costs.

Packaging is also a place to explore better options. Are your products suitable for padded mailers or do they need a box? Packaging has become more complicated and branded and often much more complicated than simple mailboxes. Is your packaging quick and easy for fulfillment staff to assemble? If not, consider a redesign to save time and labor.

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Rethink customer service

Unfortunately, customer service is often seen as an expense and many companies overlook the brand strength and revenue potential of interacting directly with customers. Often times, this is the only interaction your customers have after purchasing. Therefore it has to be meaningful.

Developing branded interactions for your customer service team will help spread positive goodwill for your brand and lead to quantifiable results. Direct reductions in refunds and upsell opportunities are created through positive customer experiences.

Don't be afraid of multi-channel customer service. Email and social media are great, but many customers still prefer billing and return over the phone. It can also convey a more "human" feel by giving your brand a voice.

Make sure you measure KPIs ranging from direct refunds and cancellations of subscriptions, to email and phone call response times, to one-touch interactions with customers. The better a customer is, the more likely they are to help you evangelize your brand for you. Think about it – would you recommend a company that puts you on hold for an hour or a company that picks up right away and solves your problem in one phone call?

Manage inventory like a pro

While dropshipping has become a popular method for many stores, COVID-19 has been exposed to massive risks in this type of e-commerce business. The shortage of air cargo capacity slowed the international mail to a near standstill and has not nearly recovered. Epacket and other international postal shipping methods are usually based on passenger planes for transportation from countries like China to the US. If the capacity of the passenger airlines is still reduced, this means slower or even immobile shipments.

Related: 3 Drop Shipping Secrets Beginners Need To Know

Projecting your inventory needs can be difficult, but it can often increase your margins and improve customer relationships. Bulk purchases reduce unit costs and freight costs. Ocean freight can be less than 10 percent of the cost of similar air freight.

Customer expectations are higher than ever, but with adjustments, ecommerce retailers can compete and even thrive in this new environment.


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