Preparing For The Highest Grossing Cyber Week in History
For businesses in the direct-to-consumer space, 2020 has created both a boom and a strain for business operations. While the increase in online shopping has been convenient for consumers and increased business revenue, the surge has created challenges for supply chains and fulfillment operations to keep pace.
As a result of transforming behaviors occurring throughout the year, we expect cyber-week 2020 to see tremendous growth as well. This is no surprise. For years consumers increasingly intermingled online and in-store shopping during the holiday season, making an omnichannel experience necessary for retailers across every industry.
In 2019, the National Retail Federation and Prosper Insights & Analytics reported a record of 190 million U.S. consumers shopped during cyber-week, with nearly 75% of consumers making online purchases. According to Adobe Analytics, online sales in April and May of 2020 were 7% higher than Christmas sales in November and December of 2019. As brands begin to prepare for cyber week 2020, the data shows they are preparing for what is going to be the highest-grossing cyber week in history. In this article, we’ll discuss actions a popular beauty brand took in 2019 that lead to a successful cyber-week, and how they plan to carry over lessons learned for Q4 of 2020.
Reflecting On A Successful 2019 Cyber Week
Since its inception, this brand has shaken up traditional retail models as a leader of the new ‘direct-to-consumer’ generation. Like most direct-to-consumer brands, they are customer-centric, focused on convivence, customer experience, and quality products.
Cyber-week is a big week for them; in fact, nearly 20% of all eCommerce orders occur during this week. With the surge of online orders during this short time frame, they had to ensure fulfillment operations can scale as well. Backorders, delayed shipments, and inaccurate orders are unacceptable anytime during the year, and this is especially true during cyber-week.
Cyber-Week 2019 Preparation and Execution
Knowing the importance of cyber-week fulfillment, OceanX collaborated with this brand to ensure fulfillment operations were smooth during this peak period. A key component of this was ‘stress testing.’ Stress testing forced OceanX’s fulfillment systems and integrations to operate successfully under challenging conditions. OceanX performed various ‘stress-tests’ to ensure systems would accurately receive orders, verify orders came in with the appropriate company code, and improve working capital operations to streamline processes and eliminate waste.
Upon stress testing, OceanX determined four fulfillment lines would be needed to pick, pack, and ship all eCommerce orders during cyber-week. To ensure each fulfillment line was operated by trained working capital, additional OceanX team members were hired in October of 2019 to train them on fulfillment processes. Having the appropriate number of fulfillment lines and trained staff enabled OceanX to ‘flex operations’ to scale to meet the demand for online orders.
During 2019’s cyber week, OceanX helped this brand achieve the following service levels to fulfill eCommerce orders:
- 75%+ Shipped Same or Next Day
- 99.5% Order Accuracy
- 6+ Average Units Per Order
- Received over 92K+ Orders within a single day
- 0 Order Delays
Preparing For 2020 Cyber Week
This brand is building upon actions that took place during the 2019 cyber-week to prepare for a higher forecast of orders for cyber-week 2020. Below is a high-level outline of the tactics they are putting in place to prepare for another successful cyber week amid COVID-19.
Incorporating Additional Fulfillment Center To Support Cyber-Week Fulfillment
In July, this beauty brand provided a sales forecast to fulfillment partner, OceanX that predicted eCommerce sales for cyber-week 2020 would increase by 64% from cyber-week 2019. To accommodate the increase of sales, this brand is coordinating with, OceanX, to pick, pack, and ship direct-to-consumer orders from two separate fulfillment warehouses.
In 2019, they only utilized one of OceanX’s fulfillment centers to ship direct-to-consumer orders. For cyber-week 2020, the decision to use two fulfillment centers was made to ensure all orders are shipped on-time while simultaneously lowering postage costs. OceanX’s inventory management system will ensure this takes place by intelligently routing orders to the OceanX fulfillment center in closer proximity to customers for faster and cheaper shipping.
Pro tip: During this exciting buying cycle, your brand will want to create a memorable experience for your customers. This experience goes beyond ensuring accurate and on-time deliveries, taking into account the unboxing experience and incentives to turn first-time buyers into long-term customers. Whatever the ‘memorable’ experience may be, it’s important that it is communicated with your 3PL to ensure it is executed to your brand’s standards.
OceanX’ Stress Tests’ Technology and Operations
The beauty brand is working with OceanX to perform resilience stress tests to test OceanX’s operations across various dimensions; identifying where processes are most vulnerable to unanticipated shifts. The dimensions include order capturing, inventory management, tracking of shipments, and working capital. Working capital specifically presents itself with a few unique challenges this year as the state of the country with COVID-19 must be considered. Employees will need to be trained on how to handle the product and maintain safety measures without sacrificing service level agreements.
Just like the ‘stress testing’ of 2019, the information from the testing will determine how many fulfillment lines will be required, the amount of working capital to execute, and the process to ensure operational efficiency is in place.
Pro tip: Keep in mind, no matter how much testing you do, you and your 3PL must also create a ‘disaster plan.’ This plan is put in place to discuss what should occur, and who should be contacted, in the event something goes array.
Some examples to prepare for include the following:
- Trained employees becoming sick
- Damaged inventory arriving at the fulfillment warehouse
- Technical issues receiving orders
- The need to add fulfillment lines to accommodate unexpected orders
Discussing a ‘worst-case scenario’ plan will ensure your fulfillment operations are prepared for anything thrown their way.
Are you worried your fulfillment operations will fail to deliver during cyber-week?
Retailers and their fulfillment partners who fail to prepare for cyber week 2020 will have a hard time keeping up with their customers’ demands. Historically this lack of preparation has resulted in backorders, delayed shipments, damaged packages, and frustrated customers.
If your brand has yet to start preparing fulfillment operations for cyber week 2020, now is the time to start. If you have concerns with your current fulfillment operations, and cyber-week is a big week for your brand, you should give OceanX a call. OceanX’s team and fulfillment technology can get you live and stable before the holiday season arrives.