Maximize Your Holiday Season with These 5 Logistics Insights for Retailers

The holiday season can be a make-or-break one for many retail businesses. Statistics from the National Retail Federation (NRF) reveal that retailers earn, on average 19% of their total sales during the last two months of the year. (Or more, depending on the business!)

As you prepare for the holiday season, we’ve got five insights for you. These tips will help you optimize your logistics, protect your margins, and keep your holiday stress to a minimum—at least where your business is concerned!

#1: The “Holiday Season” Starts Earlier Every Year

Remember the days when the holiday shopping season (semi-)officially kicked off with Black Friday, the day after Thanksgiving?

21%

Those days are long gone, with new statistics showing that holiday shoppers have, on average, finished 21% of their holiday shopping by mid-October, according to a Google/Ipsos survey.

Additionally, half of the consumers surveyed were willing to consider shopping with new stores or brands, giving retailers extra incentive to be fully stocked and ready to go at the start of October.

If you’re one of those retailers coming off the big back-to-school rush, it’s important to plan inventory restocks early. That way, your storefront will be ready to capture as much business as possible in early October.

Holiday Insight: To maximize your revenue—and your profits—plan ahead with both your suppliers and your freight forwarder. Start by working backward from the dates you’ll need your inventory in hand. Your freight forwarder can help you calculate the necessary shipping times. (Plus a little extra cushion. More on that in a moment!)

Thoughtful planning will ensure optimal stock levels—and enable you to take advantage of the most economical methods of shipping your inventory, such as ocean freight.

#2: “Peak Season” Presents Shipping Challenges

In straightforward economic terms, you’ll see the principles of supply and demand in action as retailers all over the globe stock up for October, November, and December sales.

As you prepare to ship your holiday inventory, you’re likely to see:

Higher, More Volatile Freight Rates

During the run-up to the holiday season, demand allows freight carriers to charge higher rates, including peak season surcharges. Additionally, for ocean freight shipments, congestion at the ports could mean long lines for drivers picking up containers, which may result in detention charges.

Your freight forwarder will be an invaluable partner in estimating these costs, so you can set your own prices accordingly.

Delays & Interruptions

When ocean freight demand rises, so do the possibilities of congestion, delays, and rolled cargo—i.e., when a vessel is overbooked and your cargo is pushed to the next sailing.

A good freight forwarder has a few strategies in their toolkit to combat these issues. For example, if you’re sending several containers, your forwarder may want to separate them into several bills of lading (BOLs). This reduces the possibility of your entire shipment from getting rolled (although it doesn’t prevent it entirely).

Your best strategy is to plan as far ahead as possible, leaving extra cushion in case of delays or interruptions.

It’s also important to remember that ocean freight transit times are only one piece of the puzzle. Once the ship arrives in port, it will need to be unloaded. Then, your goods will need to be picked up from the port and prepared for delivery. Your freight forwarder can help you estimate the door-to-door timing so you can plan.

Holiday Insight: Need some of your goods fast? A good freight forwarder can also connect you with air freight solutions. Air freight consolidations can make this mode a little more affordable. Expedited LCL is another option that offers a faster alternative to traditional ocean freight.

#3: Free Shipping Still Matters

During the holidays, carriers deliver as many as ~90 million parcels a day.

46%

Percentage of shoppers who cited “free shipping” as the most important consideration for shopping online

You can’t deny the importance of small parcels during the holiday season, which is why we wanted to spotlight one of the most important factors consumers cite when choosing an online retailer: free shipping.

46% of consumers in a CivicScience survey cited “free shipping” as the most important factor in choosing where to shop online. For comparison, “buying from a trusted website” was the next most popular factor, selected by just 20% of people.

In other words, free shipping matters to consumers. It’s an important possibility to consider during the holiday season.

As we noted above, small parcel carriers may charge demand surcharges, so it’s also critical to weigh consumer preference against the potential cost to your business.

One option to consider: buy online, pick up in store (BOPIS) options. BOPIS strategies can reduce your final mile shipping costs by offering consumers “free” delivery options that don’t cost them anything out of pocket (but do require them to stop by a retail location).

As a bonus, offering BOPIS options to your customers can also:

• Encourage extra spending since shippers tend to make additional purchases in store while picking up their orders.
• Help you capture additional last-minute sales by giving customers options for purchasing gifts after shipping cut-offs.

Side Note: If you’ve only got a brick-and-mortar presence, we’ve good news. Brick-and-mortar numbers for holiday shopping have been trending upward since 2021. In other words, consumers are increasingly willing to do some of their shopping in person—which takes shipping out of the picture entirely.

Holiday Insight: Offering BOPIS options means you may need to adjust your inventory strategy to keep a deeper backstock of popular items. Monitor your inventory levels closely so you can prevent out-of-stock situations, which may mean losing out to a competitor.

#4: Returns Come with Pluses and Minuses

Holiday returns can be notoriously costly for retail operations.

18%

Returns rate during the
holiday season

In fact, retailers can see a returns rate as high as 18% during the holiday season. Additionally, returns fraud can also be a problem, with the National Retail Federation estimating that as many as 10.4% of returns are fraudulent.

That said, easy returns remain important to consumers, with 98% of consumers in a FedEx study reporting that fast and convenient returns make them more likely to order again.

Understanding the cost—and knowing the importance to consumers—retailers need to strike a balance between convenience for customers and expenses to the operation.

Interestingly enough, more than half of the respondents in the FedEx study were willing to pay for hassle-free returns. In other words, there’s room for retailers to recoup some of their costs—as long as they provide a smooth and easy system for returns.

Holiday Insight: Retailers might also consider BORIS options—buy online, return in store. These options can eliminate the significant cost of return shipping. However, like BOPIS strategies, BORIS options require operations to rethink their inventory management strategies to handle the new inflow of stock, which may or may not be in sellable condition.

#5: Take a Breath, Evaluate, and Prepare for Next Year

Finally, when all is said and done, it’s tempting to have a seat, wipe your brow, and leave all the holiday craziness behind.

Before you close the book on the year, spend some time to look back on your holiday season. While everything is still fresh in your mind, consider a stop/start/continue analysis to capture insights. This format offers a simple way to evaluate what went well, what didn’t, and what you can learn from everything that happened to make next year’s holiday season even better.

Ask yourself:

• What do we need to stop doing?
• What do we need to start doing?
• What do we need to continue doing?

A couple of areas to consider:

• Suppliers – Do you need to find any alternate suppliers to reduce risk during future “rush” seasons?
• Inventory – Did you have enough on hand? Or do you need to strike a better balance between your just-in-time/just-in-case strategies?
• Logistics – How well did your freight flow work? Do you need to start planning earlier? Try different modes? Or do you need a different freight forwarder in your corner?

Get everything down while it’s still top of mind, and you’ll set yourself up for an even more amazing holiday season next year.

Holiday Insight: Don’t forget that Lunar New Year is right around the corner! Like the holiday season, Lunar New Year can mean higher freight prices and delays. Get ahead with our guide to Lunar New Year freight shipping.

Making the Most of the Busiest Shopping Days of the Year

The holiday season is a stressful, yet rewarding time of the year for retailers. By planning ahead, in concert with your suppliers and your freight forwarder, you’ll be prepared to maximize your revenue—and your profits.

Need some help planning your freight flow for the busy season? Our experts would be happy to help! Just reach out for a complimentary consultation. Together, we’ll take a holistic view of your freight needs and uncover the most efficient ways to keep your operation stocked, even during its busiest months.