As the year comes to a close, many businesses are on the verge of their peak demand season. While higher sales at this time are critical to your bottom line, ensuring efficient order fulfillment amid an influx of activity can be challenging.
Attention to a few key preparatory steps in your peak season planning can help. Here are seven strategies to make the most of demand surges without sacrificing timely deliveries.
1. Forecast Demand
The first and most important measure to forecast is the kind of demand spike you could experience. Artificial intelligence (AI) is an indispensable tool here. Businesses can reduce product unavailability by 65% through AI because it provides more accurate forecasts than manual analyses.
Of course, you must respond to any predicted shifts in sales. Adjust your orders from suppliers to increase safety stocks of the items your algorithm suggests will see the strongest rises. It’s also best to distribute these products according to regional demand, placing more of them near facilities likely to see the highest order counts.
2. Improve Inventory Visibility
After implementing demand forecasting, you should prioritize inventory visibility. The only way to respond quickly enough to activity during your peak season is to meet changing needs as they arise. At the same time, many enterprises lack real-time visibility into their current stock levels, and just 43% of retail apps make such information available to buyers.
The Internet of Things (IoT) and digital warehouse management systems (WMS) are the most critical technologies for this purpose. IoT supply chain tracking can report inventory levels and shipment locations in real time. You can then compile that information into a cloud-based WMS to access it from anywhere at any time. In turn, you enable efficient ordering as necessary and maximize transparency with consumers to prevent stock-outs.
3. Automate Where Possible
Even with greater insight into your current and expected stock levels, efficient order fulfillment is only possible with faster operations. Consequently, you should also consider automating your logistics workflows wherever you can.
AI can automate much of the reporting, data entry, scheduling and other administrative work that would otherwise take time from physical tasks. You can also use robots to streamline repetitive, time-consuming warehouse operations — potential targets include packaging, order picking and loading trucks.
4. Consider Seasonal Labor
While automated solutions will lower your expenses over time through their efficiency, only some can handle their upfront costs. Seasonal labor can fill the productivity gap if you find yourself in the alternate position.
Searches for seasonal jobs have risen by 18% in 2024, while postings have increased by just 8%. This means you face less competition as an employer to fill temporary roles, making it easier than in previous years to find qualified workers on short notice. However, keep your hiring plans in line with your predicted demand to avoid spending more than necessary on seasonal labor.
5. Rethink Your Warehouse Organization
Suboptimal storage layouts both hinder your ability to keep additional stock on hand and may stand in the way of faster picking or packaging workflows. Place high-demand items closer to packaging and shipping lines to minimize picking-related travel time.
It’s also a good idea to capitalize on vertical space. Vertical storage increases productivity and storage density by holding more goods in less floor space, enabling quicker picking despite larger stocks.
6. Ramp Up Communication With All Parties
Communication is also key ahead of seasonal peaks. Once you have an estimate for predicted demand but before the season starts, talk with your suppliers and logistics partners about the incoming changes. That includes going over any necessary order adjustments and ensuring 3PLs can handle the influx in shipments you expect.
You should also communicate with your customers. Post warnings about potential delays or stock-outs ahead of time to manage expectations in case an unforeseen situation arises. You can also implement a chatbot to help answer questions about shipment times or resolve disputes as employees become busier.
7. Plan to Bolster Reverse Logistics
Returns are an easier-to-miss part of efficient order fulfillment. The average retail return rate has risen to 14.5% — a figure that goes up to 15.4% around the holiday season. As sales peak, so do returns, so your reverse logistics network needs to work just as well as your outbound shipping processes.
Partnering with a single returns management service or creating a dedicated internal force to manage reverse logistics will help. Remember to give this team access to the same real-time data as warehouse operators so inventory levels remain accurate as some goods return. Additional customer service support through chatbots or seasonal labor will also help streamline these workflows.
Peak Season Planning Starts Now
Brands have a lot to consider ahead of the year-end demand spike. Consequently, peak season planning must begin far in advance and cover considerable ground. These seven steps will help you prep for the incoming rush to remain efficient and bolster your reputation with customers despite the added pressure.
