Preparing for the Holidays

If you’re a consumer cataloger, chances are you conduct the bulk of your business during the fourth quarter. But you shouldn’t wait until then to prepare your operations for the holiday crunch period. Ideally, you should have started planning for holiday 2004 as soon as holiday 2003 was over.

“The secret to adequately preparing the call center and warehouse for the holiday season is in the metrics that all catalog companies should maintain,” says Allan Kohl, senior partner with Montreal-based operations consulting firm Kom International. In particular, you should review the number of inbound and outbound calls, the inventory volume needed at various points during the holiday season, and any warehouse problems such as a lack of shelving.

“Gather up the statistics generated by season, product, product volume, daily activity, and days of delays in shipping orders, and say this is what we did, and this is where we want to be in the next season,” Kohl advises.

It’s also important to remember what you did well — and what went wrong — during the previous year’s holiday crunch. Several mailers contacted say they aim to learn from last year’s experiences.

Give yourself some space

For Lowell, AR-based knives and men’s gifts cataloger A.G. Russell, the biggest challenge of the past few holiday seasons has been adapting the warehouse to keep up with the growth of the 40-year-old company’s second title, Russell’s for Men, says president Goldie Russell. The gifts catalog, which launched in 1998, now accounts for 28% of the company’s annual sales.

Storing some of Russell’s for Men’s bulkier products, such as the best-selling Daisy BB gun, “probably takes 100 times as much space as it takes to store one knife,” says Russell. That’s why the company is constructing a second level to its 10,000-sq.-ft. distribution center.

A.G. Russell, which moved into its current facility in March 2002, plans to have the second level completed by the beginning of August. The second level will offer the company an additional 5,000 sq. ft. of floor space.

Spread the wealth of deliveries

During the frantic holiday season, you may find it easier to accept smaller, more frequent product deliveries rather than huge shipments. Instead of having all the vendors deliver, say, 100 products on the first of the month, A.G. Russell this holiday season will ask them to make two deliveries, such as 50 units on the first and another 50 on the 15th.

In addition, the company will order merchandise 90-120 days in advance of anticipated need. That’s 30-60 days earlier than it has previously given vendors merchandise orders during the holiday season. This should prevent logjams in the receiving area due to an abundance of reorders arriving at the same time.

Demand proper packaging

Speed in picking and packing is key during the holiday rush. Kom International’s Kohl says catalogers should make sure the products received from vendors are packaged so that workers can easily organize and find the merchandise in the warehouse.

For example, you might discuss with your vendors how they should label the boxes in which the goods are delivered — with computer-printed labels vs. handwritten codes — so that warehouse workers have no problem identifying the contents. In fact, you could ask vendors to put the item number you have assigned to that particular product on the master box, as well as the quantity and a description of the products in the box.

“If you don’t ask for it up front and insist on some form of discipline,” Kohl explains, “you won’t know what the warehouse is going to be faced with at the time of receipt.”

Boca Raton, FL-based jewelry cataloger Seta Corp. provides each of its product vendors with a manual containing an agreed-upon set of rules and standards for the labeling of master boxes, says chief operating officer Tim Holody.

The requirements include the entry of an advanced shipping notice (ASN) into the Seta employee Website to alert the company that a shipment of inventory is on the way, “plus various carton and individual item markings and other preparation standards that vary from vendor to vendor and item to item,” Holody says. Some suppliers, for instance, are asked to identify boxes of merchandise that distribution center employees will have to repack into Seta boxes.

Secure your seasonal work force

Middleton, WI-based American Girl (formerly known as Pleasant Co.), which produces and markets the American Girl line of dolls and books, begins to look for seasonal help in June and continues into early November, says Jeff Freeman, senior vice president of operations. The company, which has a baseline staff of approximately 725 employees in operations, increases its operational work force to 2,000 during the holiday season.

To entice — and keep — good seasonal help, “we try as much as possible to integrate seasonal staff into full time staff,” Freeman says.

That means giving its seasonal workers the employee discount on all American Girl merchandise as well as products manufactured by parent company Mattel. Holiday workers are also eligible for bonuses for referring new hires to the company. And American Girl provides flexible working hours, such as 8:30 a.m.-2:30 p.m. shifts in its call centers, to accommodate parents with school-age children.

Seta expands its work force 20%-25% for the holiday rush, says Holody, and it processes 80,000-90,000 packages per month during the height of the season in early to mid-December. In comparison, it processes an average of 60,000 packages a month during late spring and early summer.

Finding temporary help is made easier by extending incentive programs to seasonal workers, Holody says: “I think it definitely gives us an edge.”

Reward speed — and accuracy

One of the performance-related incentives that Seta extends to both seasonal and year-round employees involves packing speed. Warehouse workers are expected to fulfill 300 units an hour. Employees packaging 300 units an hour or less might receive $10 an hour, whereas those exceeding that volume might receive an extra $3 an hour.

If you do decide to reward speed, don’t sacrifice accuracy and quality. “It’s never a good idea to incentivize any employee without setting up accuracy and quality standards for the job,” Holody cautions. “In our picking area, the production standard is 300 units an hour, while the accuracy/quality standard is set at 99%.”

Then again, Holody adds, “It’s my experience that the top production performers almost always have the best accuracy/quality for the job they’re performing.”

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