Fulfillment Strategies for the 2024 Christmas Season

Already in spring, it is time to prepare comprehensively for the challenges of the 2024 Christmas season. Boris von Brevern, founder of BORIS Consulting GmbH and an expert in this field, has intensively examined current experiences and innovative fulfillment strategies.

By: Boris von Brevern

(Hamburg) The 2023 Christmas season brought significant problems for many retailers: high order volumes that had not yet been processed, and simultaneously limited logistics capacities. Cooperation with transport companies proved to be difficult. Noticeable long delivery times burdened the trade, and the weather conditions alone cannot explain this development in the modern retail landscape.

Logistical Bottlenecks and the Battle for Swap Bodies

During the 2023 Christmas season, many deliveries took a week or longer, while parcel delivery services simultaneously flooded parcel shops to get rid of the mass of packages. What were the causes? The delivery time was longer than usual because there were too few swap bodies available. Parcel shops were overwhelmed because too few parcel deliverers had to deliver an enormous amount. When dropping off at parcel shops, deliverers could quickly get rid of many packages at once. Initial forecasts suggest that the parcel volume in 2023 increased by up to 2% compared to 2022, despite a weakening economy. In 2022, around 4.15 billion packages were shipped in Germany alone, according to Statista. The question for logistics companies like DHL and Hermes is how they can increase their capacities in the coming year. More swap bodies are particularly necessary to transport goods effectively between depots. However, these are highly contested. The resulting backlog in outgoing goods due to delayed package pickups forces retailers, logistics providers, and fulfillment service providers to create additional buffer spaces.

Optimization with AI and Multi-Carrier Strategy

Workshops to analyze the past Christmas season can reveal optimization potentials. AI-based software offers a way to obtain better forecast data and intervene in logistics processes in a timely manner. These measures require time, so early preparation for the 2024 Christmas season is advisable. A multi-carrier strategy that involves several transport companies increases resilience and not only provides flexibility in bottlenecks but also strengthens customer loyalty, as customers can choose their preferred carrier. The use of UPS could be a promising option, as there are relatively few negative experiences reported. However, UPS is not 100% focused on deliveries to private households.

Decongesting Sales Peaks and Early Customer Communication

The connection between logistics and marketing is another crucial solution approach. Early relief of overall logistics can be achieved by retailers introducing sales peaks through targeted actions such as early booking discounts, starting even before November. Other options include promoting Singles Day on November 11, Black Friday, or Cyber Week deals. Additionally, customers should be informed in a timely and proactive manner about possible delays to reduce demand volume while saving costs.

AI and Local Businesses for Optimal Solutions

The role of AI in logistics optimization is increasing. AI systems can make better forecasts about expected order volumes. Analyzing shipment data, such as transit times, delivery rates, and deliveries to parcel shops or parcel stations, is also useful to strategically plan and direct logistics flows with the data obtained. The quality of the carrier can also be quickly assessed here.

Retailers who have a branch structure in addition to their online business are advised to connect the sales channels in a holistic omnichannel strategy. This usually leads to an increase in sales, and the branches should also be integrated into the logistics strategy. It should be examined whether the branches can also be used as mini-logistics centers, for example, for ship-from-store or buy-online-pick-up-in-store.

Advantages of a Multi-Warehouse Strategy and Fulfillment Service Providers

It should also be examined whether it is worthwhile to outsource logistics fundamentally. Not only can one focus on their core business, but professional fulfillment service providers through multi-user warehouses are often better positioned logistically. Currently, there are over 1 million m2 of vacant space available with service providers in the market, allowing for excellent service at very good conditions. Additionally, many service providers have an interesting warehouse network, so that depending on shipping volumes, storage in multiple warehouses, similar to Amazon, not only creates more logistical proximity to customers but also makes it more resilient against failures.

Conclusion

Early preparation for the 2024 Christmas season is crucial to meet the challenges from the past year. Optimizing fulfillment strategies, implementing AI, a multi-carrier strategy, and closely linking logistics and marketing are critical for success. Utilizing local branches, examining outsourcing options, and considering the services of fulfillment providers offer promising approaches. Overall, it is evident that integrated and proactive planning is essential to operate smoothly in the 2024 Christmas season and to sustainably delight customers.

Photos: © Loginfo24/Boris von Brevern

Boris von Brevern: After over 2.5 years of successful self-employment, Boris von Brevern founded BORIS Consulting GmbH (Buy Online Return In Store) in Hamburg. As the owner and mastermind of the company, he is characterized by goal orientation, passion for trade, and zest for life, which form the basis for his professional success. Boris von Brevern is a recognized expert in his industry, setting standards in the market with his ideas and visions, always focusing on the end customer. https://borisconsulting.de/