If you’re going to have a problem in your eCommerce business, a sudden spike in demand is about the best one to have. However, that doesn’t make it any less stressful when you’re rushed off your feet trying to manage inventory, fill orders, and keep people happy without falling behind.
The first reaction to high demand, after the initial mix of panic and elation, is to increase your restocking efforts. Getting more inventory in the door makes it easy to get more out of the door. There are also a variety of other tactics you can employ to speed up fulfillment and better respond to increased needs. So, let’s look at what you can do beyond increasing your resupply frequency or order size with manufacturing and wholesale partners.
Optimize space and people
When demand spikes, it will change how people move throughout your warehouse. Leaders and managers should monitor this and come up with plans to take advantage of these changes while also eliminating bottlenecks.
Ecommerce order spikes generally happen around specific products or product families, not across a complete set of SKUs. Typically, that means picking lanes get crowded, and you can face wasted time as pickers wait on each other to access common products. There are two ways to address this quickly. First, you can move your newly popular products as close as possible to packing stations and create more room around these shelves to accommodate higher traffic and faster picking. Or you can adopt zone-based picking where one person is required to get all of the SKUs in their area for every order, and these are then combined appropriately at picking stations.
At the same time, you should look at the space in your warehouse and see if you can clear additional shelves or add vertical height to locations for your products. Make room to avoid waiting as well as accidents if your goods require equipment such as carts or forklifts. Maximizing space can also give you room for some advanced fulfillment techniques such as cross-docking.
Consider cross-docking and backorders
Cross-docking can be an effective way to address eCommerce fulfillment problems, especially if you’re having trouble keeping products in stock — whether that’s a surge in demand or when you have supply chain issues like those COVID-19 caused.
Cross-docking is when you receive products via a truck or shipment at your warehouse and immediately start using them to fill orders from the warehouse floor. You’re skipping the put away stage and getting these goods packaged and ready to ship. You’re moving it across docks, from receiving to shipping.
This helps with addressing high demand by reducing the steps your team needs to take to fill orders.
Generally, cross-docking is faster, but you’ll need to prep the area and make space available. You’ll also want to find ways to verify order and inventory accuracy during this process. Handheld scanners can be a tremendous help, especially if you require pickers and packers to scan orders.
When specifically looking at a surge in demand, cross-docking can be paired with another valuable tool: taking backorders. Accepting backorders can keep revenue flowing and allow you to have enough cash on hand to increase your resupply frequency, hire temporary help to keep operations running, or afford new shelving and infrastructure required to handle the demand.
You’ll want order status to be obvious on your website, and ecommerce backorder management should also include creating emails and notifications to tell customers when products arrive, orders ship, and delivery is expected. To keep people happy, you’ll want to fill and ship these orders as soon as possible. Cross-docking allows you to speed up these activities when products arrive, reducing time to fulfillment as much as possible.
Train your team
The best training for these shifts comes ahead of your newfound demand. Teams should know what to do and how to adapt, especially if you need to change picking lanes or revamp your space. If you haven’t trained them already, start as soon as you see the demand spike.
Review policies with your team and reinforce existing requirements. You don’t want someone to start rushing pick or pack, because that can decrease order accuracy and lead to more complaints and refunds. Train your team on new procedures and how to doublecheck everything, keeping them ready for such shifts.
One important note here is to train leaders and managers, too. It’s wonderful every time demand increases. However, that can create scenarios where people are put under unreasonable expectations or face unattainable goals.
Prep your return plan
Unfortunately, surges in demand can also bring about surges in returns, exchanges, and customer support tickets. So, while your warehouse team is busy trying to adjust and respond to the increase in demand, leadership needs to discuss what to do if you face corresponding increases for other teams.
Marketing should be looking at where the demand is coming from and creating a plan to address increased communication from these channels. More folks buying via Instagram can also give you more questions, complaints, and spam, for instance. Share this data with customer service teams, especially if you provide website chat or man the phones. It helps to know demand and demographics for appropriate planning.
Inside the warehouse, leadership should look at how to allocate space and your workforce in case they face more returns than usual. Handling them is a reactive process, but proactive planning will make it easy to address without harming your overall fulfillment. Someone on your team should continually review order data and customer service communications to spot patterns that predict returns for your brand.
Like any process, you need to plan for secondary occurrences and impacts. When you’ve got a robust strategy, you’ll be best prepared to control warehouse material and labor costs, keeping as much additional revenue as possible from your demand increase.
Guest Blogger – Jake Rheude
Jake Rheude is the Director of Marketing for Red Stag Fulfillment, an ecommerce fulfillment warehouse that was born out of ecommerce. He has years of experience in ecommerce and business development. In his free time, Jake enjoys reading about business and sharing his own experience with others.
Header Photo: dusanpetkovic – Getty Images