Ecommerce: Don’t let demand spikes burst your bubble
A surge in demand is something to celebrate in the world of e-commerce. You should savour every moment as the orders come flooding in. Unfortunately however, sudden success can sometimes evoke a very different reaction: blind panic. Most e-commerce companies have adequate order fulfilment protocols for day-to-day demand, but what if you can’t cope with order lists longer than the M1?
The Internet has given shoppers infinite choice. They can have whatever they like delivered within 24 hours. Fulfilling orders therefore requires a complex e-commerce infrastructure, huge resources, and a fulfilment team that can deliver items to individual locations across the country. This creates huge problems when demand oscillates wildly.
If you don’t have the processes in place then success stories can quickly turn to nightmares. Online shoppers are quick to complain when orders turns up late, damaged, or not at all. And it only takes one bad review to sink your business’s reputation.
Order surges happen for a variety of reasons. Normally they’re caused by events such as Black Friday, that frenzied day of bargain shopping that recently crossed the Atlantic. Sometimes, however, unanticipated events like heat waves can lead to dramatic spikes. If you’re in the sunglasses business, then a prolonged spell of hot weather can be great for profits. It’s the same for meat manufacturers. One whiff of barbecue weather and the great British public go silly for sausages.
According to British Retail Consortium, spending growth increased at its fastest rate for four years in May this year. Experts have attributed this to a combination of unexpectedly mild weather, the royal wedding, and the two bank holidays. Sales of summer clothes, garden products, and party supplies went through the roof. It’s a similar tale in winter during cold snaps. As soon as temperatures hit zero people rush out and buy woolly hats.
Another common cause of demand spikes is e-commerce products going viral. One such example was a new mobile phone protector. This clever device used a special liquid to fill in unevenness and little blemishes on phone screens. This makes them incredibly resilient so they don’t break when dropped. No wonder the manufacturers became a surprise package of 2017. But they wouldn’t have been successful without a robust fulfilment protocol in place.
Demand spikes can cause a number of problems. Order processing can slow down, manual interventions rise, EDI transaction errors also increase, and inventories can go awry. This often leads to incorrect inventory information, delayed orders, missed orders, and unhappy customers.
What’s more, you can’t design your supply chain network purely to cope with spikes that might only occur once a year. Your warehouse would be overstocked and you might have to markdown prices to shift the surplus. This will obviously erode your profits.
The only solution is to create a supply chain that’s scalable and flexible. And the best way to do this is to outsource your e-commerce order fulfilment needs. A professional outfit with a vast infrastructure like Menzies Response can cope easily with sudden spikes. We have both resources and the experience so there’s no impact on your customers’ experience.
When DIY isn’t the answer
Picking, packing, and dispatching orders is extremely challenging for e-commerce businesses, particularly small companies and start-ups. So why get overworked and out of control as your business grows? Outsourcing order fulfilment gives you a simple, secure, and flexible solution to fluctuations in demand. What’s more, using a third party removes the hassle of storing, delivering and handling returns.
Sometimes it’s satisfying to do things for yourself. But sometimes it’s prudent to leave things to the experts. Your e-commerce company’s growth hinges on meeting the needs of your customers, so make sure you can meet their changing demands. Then you can concentrate on what you do best: running your business not fighting fires.