It’s almost that time of the year when people all over the world are beginning to feel the festive energy, preparing for friends and family to get together, exchange gifts, and celebrate the season of joy and lights. While people can be seen spending hours scrolling on different e-commerce sites picking and choosing the right products they want for the different festivities they have planned (clothes, decorations, gifts etc), there is a whole other world on the other side of the mobile screens (metaphorically) racing against time to both capitalise on the increased demands of the holiday season as well as facilitate smooth shopping journeys during what is expected to be the busiest time of the year.
According to a recent Deloitte report, holiday retail sales are likely to increase between 7% and 9% in 2021. Deloitte’s retail and distribution practice projects that holiday sales will total $1.28 to $1.3 trillion during the November to January timeframe. It also forecasts that e-commerce sales will grow by 11-15%, year-over-year, during the 2021-2022 holiday season. This will likely result in e-commerce holiday sales reaching between $210 billion and $218 billion this season.
In the Middle East, most e-tailers have enticing sales and promotions running from November onwards including the 11.11 Singles Days sales, White/Yellow/Red/Black Fridays, White/Black Novembers, Cyber Mondays and so on. While the colours and days might change depending on the brands and what it represents, the idea and crux remains the same – using deals, discounts and big baskets to get bargain-hungry consumers to buy more during the peak season.
While the concept originated in America, the phenomenon has gone global over the past few years and has found significant engagement in the Middle East. For instance, in a 2019 global survey, 45% of Saudis announced their intention to participate in Black Friday that year, spending an average of SAR 899 (US$ 240).
Therefore, it comes as no surprise that the preparation for this relatively short period starts months in advance for retailers. In fact, for Amazon, White Friday 2021 actually marks the beginning of the preparation for White Friday 2022. With evolving customer expectations, e-commerce companies are constantly under pressure to deliver quickly, accurately and on-time, without compromising on the quality of customer service in every order. The multitude of orders received during White Friday puts every aspect of their operations process to the test. At the same time, it also provides a gold mine of customer data that enables them to better understand the latest customer trends and behaviour.
“Preparing for peak season 2021, actually started at the end of peak 2020. Each year, we analyse our performance and find ways to raise the bar of excellence for the next peak,” said Prashant Saran, Director of Operations for Amazon MENA.
“We have invested millions of dollars in a new conveyance system within our largest fulfillment centre in the UAE, which increased the capacity of the centre by 25%, enabling us to deliver more products, faster. Throughout this year, we have been enhancing our processes and systems to reach more customers in a shorter delivery time. We increased the area of our delivery stations by 70% and fulfillment storage capacity by 60% in the UAE, which helps us meet the increased customer demand during peak period,” he explained.
Empowering the Manpower
However, it is not just the processes and operations that need to be rethought during the holiday season. The deluge puts pressure on the workforce and it is key for the people of all elements of the retail chain to be prepared and ready for the surge. IT teams needs to be familiar with the baseline metrics used to measure the performance of applications and websites, delivery teams need to be aligned and ready for all customer-facing services, and the entire retail staff need to work towards delivering on the promise of speed, convenience and reliability.
“Our annual talent and recruitment plans – for both seasonal and permanent employees – are built with the peak season in mind. We also plan for re-assignment of employees within our Fulfillment Centres during busy shopping moments. As peak season sees many new seasonal hires joining the team, we believe this provides great opportunities for employees in the fulfillment process to learn new roles in other departments, mentor new comers and even take on new leadership roles,” he said.
Connect and collaborate
Customers in the region are increasingly demanding faster deliveries and more delivery options. According to a regional consumer survey by Kearney, more than half of the customers in the GCC expect one-hour or same-day delivery of their orders. While same-day deliveries might have been a far-fetched notion a few years back, today it is becoming a factor that could make or break a customer’s relationship with a brand, retailer or marketplace. That’s where effective collaborations and strategic partnerships come into play.
“By collaborating with partners to serve our customers in even the most remote locations such as Saudi Arabia’s mountainous Al-Soudah which is 3,000 metres above sea level, and the preserved traditional settlement of Rijal Almaa,” he said.
“We work together with our local and regional partners to master the local addressing systems and the lay of the land, while ensuring that each order is delivered with speed, care and accuracy. We also work with our carrier partners, Emirates Post and Saudi Post to unlock scale and reach more customers with millions of products from suppliers across the world,” he added.
“We opened two new delivery stations in Saudi Arabia and two in the UAE this year. Based on decades of process improvement and innovation, our technology allows us to place delivery stations and other pick up points close to large customer populations,” he said.
Dive into the Data
Use of both structured and unstructured data is going to be paramount for both understanding customer needs and personalising services and products to meet those needs, as well as to ensure smooth back-end operations. Real-time analytics that tracks revenue and alerts retailers to inventory locked up in shopping carts can also help them keep on top of the frantic pace of the weekend. Application-performance monitoring (APM) solutions are powerful tools for keeping an eye on the vital signs of commerce platforms and informing them in real time of issues such as heavier-than-expected traffic or drops in successful transactions.
“From receiving products into our facilities to outbound delivery to customers, we use machine learning and artificial intelligence to define where products are and how they should move from point A to point B. Within our fulfillment centres technology provides our employees with the most optimal pick path to find items from among the millions stored, optimising these paths to reduce walking for employees. We also use AI to improve the packing process to reduce waste by optimising the size and weight of shipping materials. On route to the customer, we speed up delivery by leveraging innovative technology to maximise efficiency on the road, optimising delivery routes and reducing delivery times,” he said.
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