Ramping Up for Holiday Shipping

Santa used to get months to check his list and prepare for peak season, but for online and television retailers such as Alibris and QVC, they need to take orders the make deliveries in a matter of days. The volume and complexity of online shipping and logistics continues to skyrocket, even as customer expectations grow more exacting. Shoppers routinely place gift orders on Dec. 21, and expect the goods on the stoop two days later.

For global shopping network QVC, the task amounts to a record peak of 870,000 orders taken in a single day — more than three times typical volume. For rare book and media seller Alibris, the task requires working precisely across ecologies of sellers and distributors. For partners like UPS, the logistics feat requires a huge undertaking that spans the globe and requires a technology integration capability with little room for error at record-breaking paces.

Listen as innovative retailers Alibris and QVC explain how they deal with huge demands on their systems and processes to meet the holiday peak season fulfillment. One wonders how they do it without elves, reindeer or magic.

Join Mark Nason, vice president of operations at Alibris, and Andy Quay, vice president of outbound transportation at QVC, as we hear how the online peak season comes together in this sponsored podcast moderated by Dana Gardner, president and principal analyst at Interarbor Solutions.

Listen to the discussion (24:08 minutes).

Here are some excerpts:

Same as Other Days – Just Bigger

Mark Nason: What we strive for [at Alibris] is a consistent customer experience. Through the online order process, shoppers have come to expect a routine that is reliable, accurate, timely and customer-centric. For us to do that internally it means that we prepare for this season throughout the year. The same challenges that we have are just intensified during this holiday time-period.

Alibris has books you thought you would never find. These are books, music, movies, things in the secondary market with much more variety, and that aren’t necessarily found in your local new bookseller or local media store.

We aggregate — through the use of technology — the selection of thousands of sellers worldwide. That allows sellers to list things and standardize what they have in their store through the use of a central catalog, and allows customers to find what they’re looking for when it comes to a book or title on some subject that isn’t readily available through their local new books store or media seller.

You hit on the term we use a lot — and that is “managing” the complexity of the arrangement. We have to be sure there is bandwidth available. It’s not just staffing and workstations per se. The technology behind it has to handle the workload on the Web site, and through to our service partners, which we call our B2B (business-to-business) partners. Their volume increases as well.

So all the file sizes, if you will, during the transfer processes are larger, and there is just more for everybody to do. That bandwidth has to be available, and it has to be fully functional at the smaller size, in order for it to function in its larger form. … These are all issues we are sensitive to, when it comes to informing our carriers and other suppliers that we rely on, by giving them estimates of what we expect our volume to be. It gives them the lead-time they need to have capacity there for us.

Integration is the key, and by that I mean the features of service that they provide. It’s not simply transportation, it’s the trackability, it’s scaling; both on the volume side, but also in allowing us to give the customer information about the order, when it will be there, or any exceptions. They’re an extension of Alibris in terms of what the customer sees for the end-to-end transaction.

Higher Expectations

Andy Quay: [For QVC], peak season 20 some years ago was nothing compared to what we are dealing with now. This has been an evolutionary process as our business has grown and become accepted by consumers across the country. More recently we’ve been able to develop with our Web site as well, which really augments our live television shows.

In our first year in business, in December 1986 — and I still have the actual report, believe it or not — we shipped 14,600 some-odd packages. We are currently shipping probably 350,000 to 450,000 packages a day at this point. We’ve come a long way. We actually set a record this year by taking more than 870,000 orders in a 24-hour period on Nov. 11. This led to our typical busy season through the Thanksgiving holiday to the December Christmas season. We’ll be shipping right up to Friday, Dec. 21, for delivery on Christmas.

We’ve been seeing customer expectations get higher every year. More people are becoming familiar with this form of ordering, whether through the web or over the telephone. It’s as close to a [just-in-time supply chain for retail] as you can get it. As I sometimes say, it’s “just-out-of-time”! We do certainly try for a quick turnaround.

The planning for this allows the supply chain to be very quick. We are like television broadcasts. We literally are scripting the show 24 hours in advance. So we can be very opportunistic. If we have a hot product, we can get it on the air very quickly and not have to worry about necessarily supplying 300 brick-and-mortar stores. Our turnaround time can be blindingly quick, depending upon how fast we can get the inventory into one of our distribution centers.

We carefully plan leading up to the peak season we’re in now. We literally begin planning this in June for what takes place during the holidays — right up to Christmas Day. We work very closely with UPS and their network planners, both ground and air, to ensure cost-efficient delivery to the customer. We actually sort packages for air shipments, during critical business periods, to optimize the UPS network.

Dana Gardner is president and principal analyst at Interarbor Solutions, which tracks trends, delivers forecasts and interprets the competitive landscape of enterprise applications and software infrastructure markets for clients. He also produces BriefingsDirect sponsored podcasts. Disclosure: UPS sponsored this BriefingsDirect podcast.

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