It’s that time of year again…peak season is here! Hopefully, you have your action plans in place and have already started to implement them to get the most out of this stretch of the year. But if not, then there’s still time to get prepared, fast, for what’s coming down the pike.
Either way, we’ve compiled three steps for better forecasting this peak season to help retailers of all types, sizes, and preparedness get the most out of this peak season.
2022 Peak season predictions
First, let’s set the stage for peak season 2022 with some predictions for what the experts are anticipating the retail climate will look like.
Here’s a roundup of what you can expect:
Be prepared for surcharges everywhere. For instance, this year, Amazon is charging an FBA peak surcharge of 35 cents more per item for goods sold in the U.S. and Canada. This means you won’t be able to avoid surcharges anywhere this year as Amazon FBA joins the likes of UPS, USPS, and FedEx. Keep this in mind as your setting your product margins to ensure fees don’t eat away at your profits.
The traditional peak season calendar is no more. Peak season timing used to be as predictable as the rising sun. Not anymore. Holiday promotions are starting earlier and earlier, and major retailers are partaking, including Amazon’s Early Access sales running in mid-October as a lead-up to Black Friday.
Inflation may take a bite out of spending. Last year rising pay and employment rates helped buoy a big peak season. This year the threat of an economic downturn and lingering inflation concerns may play a big role in stimying spending.
3 Steps for better peak season forecasting
With these factors and more affecting the 2022 peak season, it’s more important than ever to have accurate forecasting heading into this peak season. Better forecasting leads to less out of stocks, fewer lost sales opportunities, and more profits for your bottom line.
Here’s where to start for better peak season forecasting:
Make data-informed decisions
There’s too much on the line for your business to make decisions based solely on your gut. In today’s day and age, you hopefully have access to previous sales data at a minimum to help use previous peak season information to guide upcoming decisions.
How much did your lead time increase during last year’s peak season? What, if any, products did you run out of? What product bundles performed the best? What supply chain disruptions did you experience?
These are all questions that data from the last few peak seasons can help you answer and infer what your strategy should be this year. Data-informed decisions can still turn out to be incorrect, but even that is a good learning experience for future peak seasons. Analyze any previous data streams you can, make a plan, execute your plan, and, post-peak season, come back to your plan to see what worked and didn’t.
Communicate with your partners
Internally and externally, make sure you have open communication with your team members and brand partners. This can be with your suppliers, shipping partners, managers, or 3PL partners, to name a few examples. Make sure everyone is in the loop and on the same page when it comes to important sourcing or delivery decisions that will have an impact up and down the supply chain.
Want to learn more about sourcing? Read our full guide on what sourcing is.
This communication can also help you avoid problems before they reach a crisis point. For instance, if you communicate with your 3PL that you’re anticipating a certain level of volume ahead of time, they hopefully will be able to either prepare accordingly or let you know that they won’t be able to meet your demand. In the latter case, this upfront communication gives you the opportunity to add additional 3PL support or find a new supplier to help meet peak season needs.
Pro-Tip: See how much a 3PL costs to help map out your fulfillment strategy.
Understand deadlines and set expectations
Know and communicate your key dates for the latest order date, latest arrival date, supplier cancel dates, last date for air freight, and any other dates that are pertinent to your internal teams and customers. This ensures that you can get your orders placed in time to get your products in time to meet demand.
For your customers, advertising these dates when customers place orders will help build trust and transparency. It also will help mitigate situations where orders arrive later than customers expect, which can result in negative reviews and loss of future sales opportunities.
Peak season is prime time for your operations, which is why you should take advantage of every opportunity. One of the best ways to do this is by investing in inventory management software to maximize your business’s output and increase your efficiencies.
Looking for other ways to create better forecasts? Learn how to forecast inventory and what demand forecasting is in our related blog posts.