Navigating Black Friday challenges - Interview with Carl Wasinger

In the stress of preparing for the holiday shopping season, some online retailers may not give enough thought to a crucial part of a successful Black Friday/Cyber Monday weekend: their supply chain. 

In a recent episode of “Click to Buy”, Instant interviewed an expert on all things supply chain and logistics: Carl Wasinger, the CEO of Smart Warehousing. 

Based out of Kansas City, he and his company help create tailored solutions for businesses to make sure your purchases reach your doorstep in a timely manner, even in peak traffic seasons. 

This article dives into key points from our discussion, including why “free shipping” isn’t really free, strategies to maximize revenue during Black Friday, and how to prepare your supply chain for the holiday rush. 

To listen to our full conversation, tune into the episode: 

The "Free Shipping" phenomenon on Black Friday

It’s no secret that shoppers love free shipping. In 2022, 76.8% of the top 1,000 e-retailers in the US offered free shipping (Digital Commerce 360 News). But have you ever considered how businesses can afford this?

The true cost of "Free Shipping”

When we talk about Black Friday promotions, free shipping ranks high in customer expectations. But as Carl points out, "There's no such thing as free." The costs associated with shipping aren't just magically absorbed. Instead, they are integrated elsewhere—maybe into the product's price or balanced out by other promotional offers.

While the debate about the sustainability of this model is ongoing, one thing is clear: "Free shipping" is a powerful marketing tool. The allure of perceived cost savings is hard to resist for many shoppers. Therefore, despite the internal shuffling and budgeting it might require for businesses, Carl doesn't foresee this trend fading away soon.

How to account for the cost of “Free Shipping” 

Carl emphasizes the importance of a balanced approach. While offering free shipping might attract customers, it's vital for brands to maintain profitability. 

For instance, a brand might normally offer free shipping after a certain spending threshold. During sales events like Black Friday, they might waive this requirement temporarily.

However, this doesn't mean all costs vanish. As Carl stresses, there's always a cost involved in ensuring the product reaches its destination. Companies need to strategize, ensuring that these promotional tactics don't adversely affect their bottom line.

Why trends like “free shipping” are becoming the norm

Trends in eCommerce are highly influenced by consumer behavior. Carl humorously terms it the "P problem" with reference to his four kids: lack of patience, planning, and an indifference to premiums. 

This consumer attitude, which perhaps resonates with many of today's younger shoppers, indicates that businesses might continue to face the pressure of providing such deals to stay competitive.

The big takeaway? While 'free' may sound like a win for consumers, businesses have a lot of strategizing and planning to do behind the scenes to make it work.

9 strategies to maximize revenue during BFCM 

In addition to considering tactics like free shipping, there is a lot to consider when it comes to getting ready for Black Friday and Cyber Monday. We discussed nine essential elements to consider when building your strategy for the big weekend and beyond. 

1. Consider the competitive landscape: Major retailers like Amazon may dominate the marketing landscape on Black Friday and Cyber Monday. Consider getting a head start to make some noise before it gets lost in the ocean of promotions. 

   
   

2. Extend your promotions: Instead of concentrating promotions on just one day, consider extending them over a week or longer. This can help spread out marketing efforts and avoid getting lost in the noise of big retailers.

   
   

3. Strategic timing: Prepare for major shopping days well in advance. Start marketing campaigns two weeks early or more to capture attention before the major rush.

   
   

4. Supply chain optimization: Spreading promotions over a longer period can take pressure off the supply chain, allowing for better distribution and fulfillment.

   
   

5. Inventory positioning: To compete with big retailers that offer same-day or next-day shipping, businesses should strategically position their inventory closer to their markets. This way, they can provide quick shipping without incurring exorbitant costs.

   
   

6. Network expansion: Having a broad network helps distribute inventory efficiently. This ensures products are close to the market, aiding in quick deliveries without premium shipping costs.

   
   

7. Positioning battle: The key to success lies in delivering products quickly and efficiently. If a company can ensure that a customer can find and receive their product promptly without having to pay a premium for expedited shipping, it can effectively compete with larger retailers.
   
   

8. Leverage new shopping days: Brands can benefit from new shopping events, like Amazon's Prime Day, by capitalizing on the trend. By creating their own promotional days or collaborating with platforms like Shopify or eBay, businesses can reach more customers and spread out their marketing efforts.

   
   

9. Localization: Positioning warehouses or fulfillment centers closer to major customer bases can significantly reduce shipping costs and improve delivery times.

While big retailers have dominated major shopping days, there's ample opportunity for smaller businesses to strategize and compete effectively. Extending promotions, optimizing supply chains, and positioning inventory strategically are some ways to ensure businesses remain competitive during peak shopping periods.

Prepping for Black Friday: The supply chain challenge

The chaos of Black Friday and Cyber Monday sales can be a logistical nightmare for brands, both big and small. But as we dove into the intricacies of eCommerce strategy with Carl Wasinger from Smart Warehousing, it becomes evident that this preparation isn't just about these singular events. Instead, it's about ensuring the health and robustness of the supply chain throughout the year.

A supply chain beyond Black Friday

Carl emphasizes that the readiness of a brand's supply chain shouldn't be dictated by just a few high-traffic days, even if a large portion of annual sales might occur during this period. It's about examining the overall supply chain integrity and health.

His strategy focuses on a product's journey. From its creation to packaging and then onto its transit through various stages of the supply chain, everything needs meticulous planning. This becomes especially important when considering spikes in volume during promotional seasons.

Tailored approaches over one-size-fits-all

What stands out from Carl's insights is the notion that there's no universal approach that fits all brands. Even for businesses selling similar products, the nuances in production, packaging, and distribution can make their logistical requirements vastly different. Brands need to evaluate their individual needs and timelines to create a tailored strategy.

During this conversation - we discussed that while there are certain best practices, it's about how these can be adapted and applied to a brand's unique situation. Strategies should be oriented not just for high-volume sales days but for sustained, year-round success.

A pandemic-era revelation

The last few years have shed light on the vulnerabilities of global supply chains. The pandemic showcased how even minor disruptions could have cascading effects on product availability and delivery. It brought the often-overlooked concept of "supply chain" to the forefront of business and consumer conversations.

Supply chains, as Carl notes, were probably never stress-tested to the extent they should have been. But recent events have served as a stark reminder of their significance. Preparing for Black Friday and Cyber Monday, therefore, isn't just about short-term logistics but about fortifying these chains for any unforeseen challenges the future might hold.

The role of the supply chain in Black Friday success

To build a supply chain strategy that can prepare a company for success beyond BFCM, Carl brought up X main points: 

1. Strategic planning is key

Ensuring that the right products are available at the right places and at the right time is a complex task. Brands need to decide on their inventory strategy: whether they'll maintain a single inventory or multiple ones, and what their delivery promises will be – be it three to four days, one to two days, or even same-day delivery.

2. Alignment across the board

Making sure that the supply chain strategy aligns perfectly with the consumer and product strategy is crucial. This alignment is vital for meeting customer expectations, and misalignment can spell disaster, especially during high-demand periods like Black Friday.

3. Synchronized data, physical network, and marketing

Brands that can harmonize their data, physical network, and marketing strategy usually come out on top. When all these elements are in sync, it results in a seamless shopping experience for the consumer – making every day feel like a successful shopping day.

The Pitfalls of underestimating the supply chain

Brands need a robust strategy, thorough alignment, and synchronization across different elements to ensure they make the most of this peak shopping period. Carl helps clarify the common mistakes that brands make when it comes to their customer journey. 

Supply chain: Not as simple as it seems

Carl's main contention is that brands often underestimate the intricacies of the supply chain. To the everyday consumer, the supply chain might seem simple — you order a product, and it arrives. 

But Carl highlights that the real process is far more complex than this superficial perspective. Brands must navigate a labyrinth of logistical challenges, from sourcing materials and manufacturing to the final product's delivery. Missteps, even minor ones, can have serious implications.

Some companies might overlook elements that could present problems down the line.

For instance, potential customs issues that could delay product availability. Such unforeseen hiccups can cost companies heavily, especially during peak shopping seasons.

Final thoughts

The world of supply chains, though often overlooked by the common consumer, is undeniably intricate and pivotal for eCommerce brands. As our conversation with Carl Wasinger reveals, brands must be proactive, seeking expertise and constantly re-evaluating their strategies, especially in the face of events like Black Friday. As Black Friday/Cyber Monday fast approaches, the lessons from this "Click to Buy" episode serve as a timely reminder of the importance of a robust and well-thought-out supply chain strategy.