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Omnichannel Fulfillment: Preparing for an Uncertain Peak Season

Give your brand the gift of an omnichannel fulfillment strategy this holiday peak season. An omnichannel approach is empowering brands to be more agile and efficient in meeting consumer expectations and uncertainty as we round the corner to the holidays this year.  

The uncertainty in the market leading up to the holidays is mounting and adding to it is the strong return to in-person shopping. Consumers want it all: online, curbside pick up, buy online, pick up in-store. But the big question as we prepare for peak is: Which channel will the demand show up in?    

Brands in the luxury goods market, in particular, have reason to be cautiously optimistic that there will be strong demand this holiday season. Consumer demand for luxury items such as jewelry, shoes, handbags and beauty products are showing signs of resilience.  High-income consumers are still spending on luxury goods. In fact, the CEO of Saks recently said that the luxury customer remains “highly engaged” in fashion and the luxury goods group, Louis Vuitton Moet Hennessy (LVMH), reported better than expected second-quarter sales, despite declining revenue in Asia. The French company also saw robust US growth and a recovery in Europe over the second quarter.

Even if consumer demand stays steady through the holidays (and that’s a big if, depending on the types of products you sell given the impacts of inflation), brands still need to be prepared to solve for additional uncertainties in consumer demand and buying behavior. Having a proven strategy to navigate logistics and manage inventory will be critical for brands to account for the mounting uncertainties leading up to the holidays.

Overcoming the cost and complexity of business this year

Overall, brands still have many hurdles to jump to meet consumer demand – overcoming supply chain disruptions, inflation and labor shortages continue to bring challenges to getting products in consumers hands in the manner and time in which they expect it.  

Outside of luxury, inflation is having an effect on consumer spending and the cost of doing business. Labor Department figures show consumer prices jumped 9.1% from last year as inflation has taken hold in the US, and gas prices surged by 11.2% in June. Higher prices come on the heels of last year’s figures which saw business logistics costs rise 22%.

Transportation is an expensive part of the ordering process in “normal” times – add in the rising cost of fuel, and the cost of transporting products has started to significantly impact the bottom line.  Small parcel capacity also continues to be a challenge, with large national carriers taking surcharges and introducing capped capacity – making it more complex to ensure speedy delivery of products to customers.

The cost and complexity of doing business is mounting. Brands need to have an intentional strategy to get inventory closer to customers to combat higher costs in shipping and fuel, especially as we gear up for the peak holiday season. Utilizing regional carriers, for example, keeps goods on the ground and closer to customers. Diversification of carriers can help solve the immediate issue around fuel costs, along with other benefits such as sustainability and customer satisfaction.

Hiring a third-party logistics provider, like PFS, to support the complexity of your ecommerce business can help you manage costs, plan and adjust for uncertainties in the market and deliver on customer expectations this holiday season. One of the advantages of using a 3PL is our ability to bring incremental carrier relationships to the table.

Engaging a 3PL partner can help your brand expand your carrier network from two to nine carriers or more and get your product into the hands of your customers faster and more reliably. A 3PL will also manage the logistics of working with an expanded carrier network and may have more power to pre-negotiate better rates – helping you to simplify your carrier relationships and keep your costs in check.  

How omnichannel fulfillment can help your brand navigate the holidays (and every day)

Brands who have embraced an omnichannel approach are already one step ahead of the game this holiday season and are more likely to navigate uncertainty in the market with greater success. 

An omnichannel approach diversifies your fulfillment and inventory points. You can think of it as “insurance” – if one method or part of the supply chain stumbles, another can pick up the slack. A distributed order management (DOM) system can help brands effectively manage their omnichannel strategy, routing orders across multiple fulfillment points and optimizing inventory across channels. With a DOM in place, brands can direct orders to be fulfilled from various locations depending on fastest delivery time, lowest-cost shipping, most sustainable delivery method, or a combination of these factors. 

A multi-node approach enables faster fulfillment and equips customers with access to those alternative delivery methods they’ve come to expect, such as curbside pick-up and ship-from-store.

PFS can help you supercharge your omnichannel approach to create a global network of distribution centers, pop-up distribution centers and micro-fulfillment centers that ensure quick delivery to your customers and a seamless customer experience across channels.

Inventory management, planning and agility are key

Predicting if, when and where consumers will spend their dollars is complicated – and only increasing in complexity as the uncertainty in consumer demand and where it will show up for the holidays is impacted by inflation and rapidly shifting consumer expectations. This is why inventory management will be key this year. Consumers have come to expect a variety of channels when they make their purchases and they will continue to come back to the brands that offer them the greatest experience, flexibility and reliability.

Even if brands get the demand-planning curve wrong, they can still have productive inventory. For instance, if you get higher online sales than anticipated, you need to be able to use inventory sitting on retail shelves to satisfy that demand. Brick-and-mortar stores become, in essence, micro-fulfillment centers in support of online orders. Likewise, if the demand shows up more in retail stores, brands need to be able to quickly move inventory either to the store, or direct to consumers without compromising the customer experience.

This peak season will be nothing if not complex. Leveraging the lessons learned from recent years, brands can control what they can and still meet customer expectations. Embracing an omnichannel fulfillment approach will help brands and retailers stay nimble and overcome the unique challenges at play as they strive to keep customers happy through the holidays.

Get in touch with PFS today to learn more about how we can help you adapt to market challenges with an omnichannel fulfillment approach.

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As Senior Vice President of Business Operations, Jamie is responsible for PFS' global portfolio of 70 brands. Throughout her 10+ years at PFS she has served in various roles across the organization, giving her a wealth of industry knowledge across verticals. Jamie applies her expertise to guide our clients to successful eCommerce operations.

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