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Surviving the Holidays: 3 Tips for the Smart Retailer

The holidays are a time of joy and good cheer, but for retailers, they can also be a time of high stress. Retailers must prepare months in advance, and after the dust settles, they must restart the whole process and prepare for the next year. With the holiday season now upon us, many retailers are wishing they had planned ahead and considered some other transportation options. See some of our thoughts below on how to be ready for the 2014 holiday season.

1.   Look at last year’s successes and failures.

  • Be proactive: John Heckman, president of the Augusta, Maine Merchant Shippers Cooperative Association states, "The time to plan for the holiday rush is Jan. 2…Retailers should sit down with their transportation department or consultant in the beginning of January and analyze last year's problems. Ask, 'What can we do to plan for the coming year?' They need a backup plan in place for next year so they can avoid the issues that affected them this season” [Source].
  • Forget estimating. Do the math: Knowing exactly how much you need of each product is the absolute most important thing you can do as a retailer. Instead of estimating, invest in a software solution. Retail software solutions can track sales of certain products at specific locations over time, then use the accumulated knowledge to predict demand during various periods. Using these tools will help retailers know how much to buy of each product so, come January, they are not sitting on mountains of unwanted goods [Source].

 2.    Think outside the box with shipping.

  • Work with a 3PL: Managing multiple suppliers and countless orders is a tricky business. With the help of a 3PL, retailers can benefit from pre-existing relationships with reliable carriers and the ability to source scare cargo space during the busiest shipping time of the year. Additionally, a 3PL’s ability to collaborate with multiple shippers benefits retailers financially because they can consolidate freight and build multi-stop loads, helping reduce costs per shipper [Source].
  • Consider using regional transportation providers: Another option is to use a regional carrier. According to Rob Martinez, President and CEO of Shipware LLC, more shippers are beginning to use regional parcel carriers because of the potential “cost savings, additional service options, and same day delivery as well as custom/specialized solutions” [Source].
  • Consider intermodal shipping: During peak season, finding capacity is a major problem for retailers. One possible solution is participating in a committed capacity programs with one of the country’s major railroads. These programs allow customers to lock in capacity at a specific rate for a certain period of time. By participating in a committed capacity program, retailers can not only guarantee they will have cargo space during the holiday season, but that they will avoid the seasonal higher rates. For more information about the benefits of intermodal shipping, request our white paper.

3.     Plan for the flip-side of sales.

  •  Develop a reverse logistics plan: Smart retailers know that the work is not over once all the gifts have been unwrapped. January and February are the biggest months for holiday returns, and retailers must have a plan in place for what to do with the multitude of merchandise reentering their supply chain. Whether that means returning merchandise to the shelves or vendors, donating to charity or recycling, every retailer needs to create a plan so their supply chains can continue to run smoothly despite the influx of returned product.

For retailers, the holidays are equal parts nightmare and dream. With the proper preparation and planning, however, retailers can limit stress and maximize profits.