With the bustling holiday shopping season nearing, many brands have spent the last several months assessing their operational strengths and weaknesses, particularly in logistics and fulfillment. Oftentimes, these hinge on the synergy between a brand and its third-party logistics (3PL) provider. To succeed in the holiday peak season and ensure seamless fulfillment, deliveries, and returns, it’s essential for these partners to monitor key metrics, analyze operational data and maintain communication.
Consider the following six metrics as North Star indicators. By tracking, analyzing and leveraging these insights, brands and their 3PL can work together to shape the performance of the holiday peak season.
No. 1: Demand forecasting.
Accurate demand forecasting is the bedrock of efficient inventory management — a vital logistics function that should be operating at peak performance levels during the holiday shopping season when consumers expect the inventory they want to be available.
Brands can delve into historical sales data, market trends and consumer insights to predict their seasonal demand patterns while factoring in changes based on promotions and actual sales. It’s what they do with this data, however, that can positively impact their logistics operations.
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With precise forecasting and sales data, brands and their logistics partners can plan down to the month, week or day to ensure inventory and staffing volumes are met. For example, when a brand informs its 3PL about an upcoming promotion or sale, the 3PL can adjust staffing accordingly, which will avoid fulfillment backup and shipping delays.
This process should begin months ahead of peak season, but for brands that may be a step behind, they can mitigate their delayed planning by either trimming marketing promotions if they are under-inventoried or bumping up their promotions if they have excess inventory.
No. 2: Order cycle time.
In the retail world, swift order processing is the hallmark of efficient logistics operations and exceptional customer service. Issues throughout an order’s lifespan will inevitably arise, yet brands have the ability to quickly identify and correct problems. How? By keeping a watchful eye on order cycle and lead times. That is the average time it takes a brand to deliver an order, from the moment it was placed online or in-store to when it is received by the customer.
Working closely with a 3PL, brands can track order processing at every touch point to identify bottlenecks and inefficiencies in the logistics process. Brands can analyze these metrics to pinpoint and correct issues when an order is being picked, packed, shipped and delivered, ensuring shoppers receive their orders on time and ahead of their holiday celebrations.
No. 3: Order accuracy.
Peak season is not forgiving of errors. During these times, it is imperative brands and their 3PL partners operate with efficiency and accuracy to prevent picking and shipping mistakes that can lead to dissatisfied shoppers, costly returns and customer attrition.
Fortunately, 3PLs can collect a range of data to help brands gauge the performance and accuracy of their fulfillment and last-mile delivery operations. This can include critical insights gathered from metrics such as pick accuracy, on-time shipping, on-time in-full and delivery success rates. A best-in-class 3PL partner should openly share these weighty data points.
With access to these metrics, brands can size up the effectiveness and quality control measures of their 3PL’s operation to guarantee shopper expectations are met in peak season and beyond.
No. 4: Return rates.
Returns are an inevitable part of retail. In fact, last peak season, at least 10% of orders were returned each week from November 2022 to mid-January 2023, per Salesforce data, as U.S. shoppers returned more — and earlier — than in the previous holiday season. There is good news for brands here. The work they put in now can alleviate the burden of a heavy return season.
Since shoppers aren’t waiting until January to start their returns, brands should work with their 3PL to streamline the return process now. They can start by looking at last-season’s return data to help identify this season’s trends. By sharing this information with the 3PL partners handling their returns, brands can restock inventory and get customers their refunds faster. That’s a win-win for brands and shoppers alike. Brands can even continue to win over customers by partnering with a 3PL that simplifies the process with returned order pickups and real-time return tracking.
No. 5: Sustainability metrics.
Retail supply chains account for an estimated 25% of global emissions, mainly through scope 3. It’s a grisly metric caused by high carbon emissions, material waste and energy consumption. But this presents an opportunity for brands to embrace sustainable, more resilient practices at each step of their fulfillment and logistics operation.
Actionable data can be generated from a product’s first-to-last mile, including emissions from supply chains and manufacturing, energy consumption in stores and warehouses, packaging disposal and greenhouse gas emitted during delivery. Brands can make a connection with environmentally conscious shoppers by tracking, and sharing, these sustainability metrics and by partnering with a 3PL that shares their commitment to tracking and reducing their carbon footprint.
No. 6: Customer satisfaction.
For any brand, customer satisfaction is the ultimate measure of success. This metric becomes even more crucial for brands during the often chaotic peak season, when shopper emotions and expectations run high. With the real-time monitoring of customer feedback and satisfaction scores, brands can address issues promptly and ensure a positive experience with every order.
Brands can take it a step further by collaborating with their 3PL on their customer support efforts. Working with their 3PL, brands can streamline their customer support program, easily exchanging data on key performance metrics, order statuses, returns and more. Brands and their 3PLs can increase visibility for themselves and their shared end-customers, saving shoppers time when they need answers quickly and ultimately boosting customer satisfaction.
Final Thoughts
Holiday shopping and promotional events are right around the corner — making now the ideal moment for brands to evaluate their operational proficiencies and inefficiencies. By tracking key metrics, analyzing operational data and keeping lines of communication open, brands and their 3PL partners can work in unison to ensure smooth logistics operations all season long.
Mark Ang is the Co-founder and CEO of GoBolt, a technology company on a mission to build the world’s largest sustainable supply chain network.
