An eCommerce brand can have the most compelling marketing and advertising, drive hordes of customers onto their website, have the best UI/UX in the world, get those hordes of customers to make purchases, yet only be a middling brand if their Operations game isn’t strong enough to keep up. In short, Operations are integral and vital to a brand’s success—especially during high volume sales periods like the holidays.
If you’re a fast-growing brand and looking for cutting-edge tips on running your Operations department, read on. This is the second installment of our Elevating eCommerce series, and we talked to a couple great eCommerce brands (Harper Wilde and Moonglow Jewelry) whose Operations games are on point.
If you want to catch the full webinar on-demand, you can watch it here:
Elevating Operations: TLDRs
-Plan, plan, and plan some more. Analyze missed opportunities from previous plans, identify areas for optimization, and keep extra product supply ("Secret Stash") on hand in case of emergencies!
-Surprise and delight everyone, and use food to make friends and build bonds. “Be the client sending your warehouse pizza on Black Friday!”
-Know your Ops terms and metrics: Weeks on Hand, WMS, IMS
-Tools for Ops success that our panelists love: (collaboration:) Airtable, (analytics:) Daasity, (fulfillment:) DHL eCommerce, (inventory management:) Skubana, (predictive inventory optimization:) Singuli, (reviews:) Yotpo
Elevating Operations: 4 Key Takeaways
1. Plan ahead (and learn from previous plans)
If there was one overarching theme from this webinar, it was the following: PLAN (caps necessary). Because operations is a highly complex element of eCommerce—one that involves a ton of moving parts and involves high levels of organization and coordination among teams and companies on a global scale—you need to plan ahead, plan well, and have some contingencies at all times (and maybe even redundancies for your contingencies). Or, in other words, hope for the best, plan for the worst, and have a backup plan or two for whatever is worse than the worst. Let’s get into some specifics.
Supply chain: Deciding among different transport options (sea, air, rail, road) and a 3PL (third-party logistics) company that can handle your brand’s particular needs will become necessary as you scale. It may be optimal to have one mode of transport handle all your shipping throughout the year. However, you may want to have a main shipping mode with a secondary mode for certain delivery regions, you may need to diversify and scale up shipping modes depending on demand during the year, or you may just always need to have a backup plan in case something (like, say, a global pandemic) happens.
Secret Stash: Besides always keeping a watchful eye on how much supply you have in your warehouse(s), you may want to consider keeping a “Secret Stash” of product, either in part of your main warehouse, or elsewhere. The secret stash may be extra supply of some of your best-selling products or perhaps products that may face occasional production/shipping issues. Your Secret Stash may just come in handy in case there is a hiccup or two during the holiday season.
Learn from last year: Some of the best learning experiences you can have in your organization can come from taking a serious look at last year’s performance and identifying all the mistakes or areas of improvement that you can. In the case of Operations:
- Which products did you not order enough of?
- Which products were difficult to keep in stock?
- Which shipping methods were the most and least reliable?
- What miscommunications did you have with your factories or 3PLs?
- Can you set deadlines for POs, to avoid major delays?
- Can you identify products or processes to eliminate that were too operationally difficult and cost your organization time and money?
2. Build, Maintain, and Foster Relationships between Teams
Because Operations requires the coordination of so many people and teams, having clear communication and close relationships will mean more success and long n’strong partnerships.
The currency of pizza (and cookies): “Surprise and delight your customers” is an oft-repeated phrase in eCommerce, and you can apply it elsewhere to win points with other teams under the Operations umbrella. Our panelists recommend sending some treats to your warehouse: “Be the client sending your warehouse pizza on Black Friday!”
Branch out your supplier relationships: Building relationships with more than one factory can be the difference between sometimes having supply issues and never having supply issues. In the case of one panelist, having a backup factory was critical during the pandemic because factories were either overworked or shutting down, and as a result, there were widespread supply issues.
Stay in lock step with the marketing team: It may seem obvious, but you can’t sell what you don’t actually have. Miscommunication or non-communication between marketing and operations can cause some serious customer experience issues and a cascade of negatives as a result. Make sure that you voice to the marketing team what is and what is not possible to deliver on. For example, if you have custom products that place higher demands on your suppliers, make sure to inform the marketing team that custom products should either not be promoted or temporarily suspended during peak demand.
3. Operations Metrics and Terms to Know (and a couple bonus terms)
Allowable CAC: The maximum customer acquisition cost (a.k.a. CAC) deemed acceptable by a brand.
GWPs (Gift with Purchase): GWPs are an alternative to discounts. If you have a low-cost and/or small product, you can throw that in as a bonus to your customers instead of offering them a promotion or discount. If the product is less than 10-20% of the order, it will not only save you money but also may make the customer feel even better than if they receive a discount, because they are getting something else. Additionally, you can offer a GWP with the purchase of more than one item, and that is a more affordable way of increasing AOV.
IMS (Inventory Management Software): An IMS is a tool that allows you to track and manage the whole of your supply chain. If used optimally, they help you avoid selling out of items and stay on top of potential bumps or snags that may come up during high-sales times (and throughout the rest of the year).
Priority SKUs: A priority SKU (stock keeping unit) is a SKU that has been identified as of particular importance to keep in stock. Priority SKUs can be graded (e.g., A, B, C) to indicate particular importance among SKUs.
WMS (Warehouse Management Software): A WMS is a tool (or portion of a tool) specifically designed to keep your warehouse on point. This means keeping track of quantities, expected deliveries, product organization, problems that may arise, among other variables.
Weeks on Hand: Weeks on Hand is a way of measuring product inventory. Instead of tracking the quantity of product(s) left numerically (e.g., 500 units left), it measures the approximate amount of time before you are sold out of a product.
4. Operations Tools You’ll Love
If you’re looking for some Operations-expert certified Operations tools, here are some of the panelists preferred technologies:
Collaboration Tool: Airtable
eCommerce and Operations Analytics: Daasity
Fulfillment/Delivery: DHL eCommerce
Inventory and Order Management: Skubana
Predictive Inventory Optimization Software: Singuli
Product Reviews: Yotpo