Seven Secrets To Your Success
Taking Care of Business in a Flash
Flash sales purchases, by nature are impluse purchases. As part of the brand experience, Internet retailers and members-only Web sites thrive on high-volume, fast-paced marketing and sales campaigns, all of which require timely fulfillment and shipping.
Most flash sales models send a daily email to members or promote specials on their Web sites. Both scenarios create a specific window of time for order processing. For example, Internet Gilt Groupe notifies its members of daily sales at noon. By design, there is an inherent urgency that is created, both for the customer to purchase products and for the fulfillment and warehouse operators to process orders and get them shipped in a timely manner.
“Flash sales are taking e-commerce to the next level,” said Joal Savino, Executive Vice President of Mercedes Distribution Center. “By design, they require a new set of tools, processes and skill-sets to keep pace with high-volume transactions, the flow of inventory throughout the warehouse, and delivering a consistent customer experience.”
As the flash sales model continues to evolve, it is important for organizations to take a closer look at how their inventory and fulfillment are managed, because traditional warehousing techniques are no longer sufficient.
Technology alone cannot solve the complexities of flash sales; nor can “smart warehouse” designs. The right combination of people and processes supported by fulfillment experience and technology automation is critical.
Flash Sales Secrets
The following are seven secrets every retailer must learn in order to ensure flash sales success:
1. Not Your Father’s Pick/Pack
The timing of flash sales is completely opposite to what is needed to optimize shipments per day. Shipping companies, such as UPS, need to enter packages into their system in the early evening, or the orders lose one day in transit time. Flash sales, however, typically don’t begin until noon. The customers may not begin buying in earnest for an hour, and after processing and credit checking delays, the orders begin to hit the warehouse floor around 2 PM. This leaves only four to five hours to ensure all priority orders.
2. Sporadic Order Flow
Order timing not only affects efficiency, but it creates an uneven flow of work. Each day there is a deluge of orders in the beginning of a new sales cycle, merged with a continuing flow from pervious sales. On top of that, orders may contain items from both the current and past sales. Stock must be properly staged to expedite the picking of the current sale orders while permitting easy access to past sales. Picking systems must be designed to permit retrieval from diverse areas and combination of stock at the shipping station. This technique is both effective and efficient, but without proper and tight controls, order flow can be haphazard and impossible to manage.
3. Non-Linear Fulfillment Approach
Due to the large bursts of transactions, orders cannot be processed one at a time–they must be handled in bulk. A non-linear fulfillment approach is essential to optimizing production. Staging individual shipments on conveyors is not productive and a waste of equipment. Orders must flow in bulk from pick to the final packing and shipping station.
4. Sell First, Fulfill Later
Many flash sales are sell firsts, that is, the required inventory needed to fulfill orders is purchased after the sale is over. The inherent delays to customers in this sales model can be made even worse by inefficient vendors. The warehouse must, therefore, be able to receive and ship in one step to keep the turnaround time to customers as short as possible.
5. No Time for Downtime
Flash sales generate large volumes of orders every day, not just at peak periods of the year. Systems, both computer and manual, must be able to sustain high volumes. Implementing a paperless environment is essential, otherwise the warehouse becomes print bound, increasing time and costs. There can be no downtime for upgrades, equipment malfunctions, or physical inventories. Most importantly, there must be a very high management commitment to keep pace with growth.
6. Return to Sender
E-commerce customers demand prompt returns processing. Their ire can quickly damage a company’s brand reputation, especially when social media tools such as Facebook and Twitter wield such tremendous influence. Returns require as much attention and effort as shipping. There can be no putting off returns and handling them as filler work or sending them to a third-party to be processed at leisure. Because flash sales have limited depth of inventory, many returns are quickly re-shipped to wait-listed customers. It is critical to optimize the return process in order to minimize lost sales opportunities from customers who change their mind or look elsewhere for the same product.
Returns are very labor intensive. Not only is the initial handling cumbersome, but they must be closely quality checked and neatly repackaged. Customers cannot feel as if they are receiving a used or “recycled” product.
7. It is Always Personal
Presentation is as important a sales tool as price and selection. While Millennials and Gen Y audiences embrace the Internet for shopping, Gen X and Baby Boomers are still skeptical, so a positive experience is vital for repeat business. Positive feedback across social media, blogs and other Web portals are the lifeblood of any brand’s reputation. That said, there is no subsititute of hand packaging of merchandise and careful inspection of returns. Intelligently designed cartons and well-trained packers are critical to keep these costs to a minimum. The marketing department may have to convince the Accounting department of the strategic value added to increased labor costs.
Flash Sales Require a New Approach
The Market opportunities of flash sales are endless. The Internet is changing how organizations–both business- to-business and business-to-consumer–are marketing and selling their products. But within this new model, there are many challenges and complexities that impact success.
Flash sales have their own unique intricacies and require a new approach to warehousing, inventory management, fulfillment and shipping.
As organizations embrace flash sales, new processes, techniques and technologies are required to manage inventory, optimize revenue and deliver a unique customer service experience.
Categories: Resources & White Papers