Many retailers are already preparing for the holiday season, and most definitely should as early as Amazon Prime Day on July 11. Consumers will begin flocking to ecommerce sites early this year in search for deals in an effort to get a head start on the holiday season.
In a recent study by Radial, peak season accounts for more than 30% of total yearly sales for retailers, which means even one small slip-up can affect annual revenues.
Before retailers go into the holiday season, here are three threats they need to watch for:
The Ghost Economy
Retailers throw away money in the form of overstocks, out-of-stock and return costs during the peak season. These losses, known as the “ghost economy”, consumed more than 4% of the average U.S. retailer’s revenue in 2014, totaling $1.75 trillion. Many retailers incorrectly assume that these losses are simply an unavoidable cost of doing business.
Retailers with omnichannel solutions, such as order management systems, can recapture 50% to 75% of these losses with intelligent inventory allocation, demand forecasting and fulfillment planning, forgetting retail’s biggest threat – lost customers. Fifty-nine percent will not return to a retailer after a bad experience, such as out-of-stock merchandise or a declined transaction.
Fraud Preparedness
With more consumers shopping online during the holiday season, there is more of an opportunity for fraudulent transactions. Experian reported that ecommerce fraud increased 33% in 2016 from 2015. That growth rate is expected to continue in 2017, as the total number of breaches has increased 56% compared to this same time last year. With fraudsters implementing new tactics every day, retailers can’t afford to assume fraud attacks as the status quo any longer, especially during peak season.
At peak season, it is important to know you have a team that is not only blocking fraudulent attempts, but also detecting new fraud trends and proactively block them. You need a fraud protection partner that’s a cutting-edge expert in technology, processes and people to completely manage fraud protection.
Securing a Strong Seasonal Workforce
Retailers must adapt to a shift in hiring demands from in-store sales roles toward fulfillment and customer care positions. For many retailers, outsourcing offers the key to providing the flexibility scale and depth needed to deliver an Amazon-like customer experience affordably. Working with a partner who can scale your operations quickly and cost-effectively can mean the difference between meeting demand or playing a losing game of catch-up.