Operations Summit Experts Expect Big Changes in Ecommerce and Catalog Operations for Holiday 2014

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72% of merchants are investing in software and technology and 44% in automation to support growing operations and fulfillment.

E-commerce and catalog operations are being challenged like never before. The 2013 holiday season demonstrated that the industry needs better ways to meet customer expectations and deliver products faster and later in the season – without breaking the bank. As customers buy more online versus in a store, merchants are investing to better serve this changing customer behavior. What follows are some key observations by e-commerce and catalog operations experts who are sponsoring Multichannel Merchant’s 2014 Operations Summit on April 22-24 in Indianapolis, IN. The Operations Summit helps merchants boost productivity, cut costs and increase customer satisfaction by providing a gathering place for operations leaders to exchange ideas, tour leading direct to consumer (DTC) distribution centers and get in-depth training on topics like how to prepare for the 2014 holiday season.

Expect Higher Peak-Day Order Volumes in 2014
“During the holiday period of 2013, most of our fulfillment clients experienced their largest year-over-year revenue growth ever!” says Steve Johnson, Principal, Johnson Stephens Consulting, Inc. “This reflects the massive shift that is now occurring from purchasing in-store to buying online. Consumers of all ages have caught on to “show rooming” and then making the final purchase via web retailers at the best price. This caused the November/December 2013 peak-day order volumes to be steeper than usual. Fulfillment operations must pay attention to this phenomenon for 2014; this will continue to demand more creative and automated solutions to meet this increasing peak demand.”

E-commerce is Growing
In 2013 holiday e-commerce sales rose 9.3% and traditional retailers are saw their online sales increase . Mike Honious, Chief Operating Officer at supply-chain management firm OHL, says, "Looking at all of our eFulfillment customers from 2012 compared with this year, we experienced roughly 48% growth on orders fulfilled on Black Friday and Cyber Monday. One specific big-box retailer customer experienced 75% online growth year-over-year for Black Friday, and 53% online growth from Cyber Monday in 2012. This continues to demonstrate the drive to supplement brick and mortar with e-commerce channels."

John Berg, Principal Partner at ProShip, an enterprise, multi-carrier shipping software solution, says that his clients, too, saw big e-commerce gains. “ProShip had customers shipping one million packages a day, guaranteeing shipping dates and seamlessly handling returns,” he said. “We can’t wait to hear which customer will be the first to ship two million packages in a day!”

Big Changes are on the Way Soon
As a result of the increase in e-commerce some industry experts are predicting big changes for the 2014 holiday season. “What 2013 made abundantly clear is that the future of parcel shipping is hazy,” says Brandon Staton, Marketing and Public Relations Manager at Transportation Impact, a small parcel negotiation and parcel auditing firm. “Both retailers and carriers say that they will make adjustments to ensure that similar problems are avoided next year. And while next Christmas seems a ways off, in terms of solving a problem of this magnitude, it might as well be tomorrow. This means changes – potentially large-scale ones – are on the way, and soon. Whether it’s as simple as retailers backing off those last-minute turnaround times, or as complex as carriers strengthening infrastructure enough to weather the next holiday storm, the implications are as uncertain as they are unprecedented.”    

Merchant Investment in Operations & Fulfillment is Growing
In addition, retailers are building and investing in operations infrastructure to prepare for the growth. “Distribution centers face complex challenges that demand flexible, dynamic operations. Multichannel distribution is revolutionizing the industry,” explains Tom Rentschler, vice president of sales and marketing at FORTE, a supply chain consulting, warehouse design and management systems, and distribution consulting firm. “In a recent Peerless Research Group study of multichannel distribution challenges, the majority of respondents indicated that they are investing in their operations within the next year to keep pace. The top investment areas were software and technology (72%) and automated systems (44%).” This topic will be explored in more detail at the 2014 Operations Summit.

Merchants have already begun investing in their operations and more investments are expected as lessons from holiday 2013 turn into 2014 plans. “In order to remain competitive, we strive to be more efficient every year,” says Ann Killeen, VP Operations at retailer Montessori Services, Inc. “This was a challenging holiday season due to Thanksgiving falling so late in November. We were able to handle the increased business in December smoothly due to Data Management Associates and our e-commerce provider integrating our website and call center orders in real time using Web Services directly into MACH Software. We are already making notes on changes to improve holiday 2014. ”

Operations Summit attendees can expect more insights like these at the April event.

About the Operations Summit
The Operations Summit (http://www.operationssummit.com) helps merchants boost productivity, cut costs and increase customer satisfaction by providing a gathering place for operations leaders to exchange ideas, tour leading DTC distribution centers and get in-depth training. It is the only conference exclusively devoted to e-commerce and catalog direct-to-customer operations and fulfillment. The conference covers Warehouse, Order Management, Picking, Packing & Packaging, Reverse Logistics, Inventory Management, Shipping, Distribution & Delivery, Technology, IT & Systems Integration, Transportation, Customer Service, Call & Contact Center, HR/Workforce Management and Payment Processing & Fraud Prevention.

About Multichannel Merchant
Multichannel Merchant (http://www.multichannelmerchant.com), producer of the Operations Summit, reaches management, marketing and operations’ professionals at companies that sell merchandise through multiple channels—including e-commerce and catalog. Multichannel Merchant delivers research, executive summaries, technology and supplier comparisons, tip sheets, news and resource information to help companies sell & deliver products direct-to-customer.

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Kevin Sghia
since: 02/2012
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