It’s a record year for holiday shopping. Can your retail fulfillment keep up?

The winter holiday season is the most wonderful time of the year for retail sales, often accounting for a fifth of total retail sales. This year, US retail sales could reach a record-breaking USD 75 billion from Black Friday to Cyber Monday. A record 183.4 million people plan to shop in-store and online over the extended Thanksgiving weekend.

During the holidays, customers have high expectations for free, lightning-fast delivery and a seamless, reliable experience. Meeting these expectations is essential for maintaining customer loyalty and satisfaction.

How can your business ensure it is equipped to handle this sudden surge in demand while still delivering a seamless shopping experience that inspires customer loyalty?

Retail fulfillment during the holiday season presents several challenges, especially given the high volume of orders, tight timelines and increased customer expectations. An unprepared retailer might lose money to 3 major risks:

Customers now have elevated expectations for their shopping experience, particularly around holiday doorbusters and gifts. In fact, in an online survey of US adults celebrating a winter holiday, 86% said that on-time delivery of gifts was a top priority.

Meeting these expectations is no easy feat—especially when delivery carriers face capacity bottlenecks, leading to delays and missed deadlines. With multiple shoppers vying for the same limited-time deals, even a slight delay or suboptimal experience can lead to frustration and disappointment.

When a retailer fails to meet high expectations, it means not only a hit to customer satisfaction but also to brand reputation, sales and long-term customer loyalty. In the same survey, 85% of respondents said they won’t shop with a retailer again after a poor delivery experience. In today’s retail environment, where customers have plenty of choice, retailers can’t afford to take this risk.

Customers expect real-time inventory visibility and accurate stock levels. If your company overpromises and subsequently cancels orders due to stock shortages, you create a significant trust gap. When an item goes out of stock, customers become frustrated by long backorder delays or unfulfilled orders, leading to poor satisfaction and potential lost sales. Retailers in the US and Canada missed out on USD 349 billion in lost sales in 2022 due to overstock and out-of-stock products.

After the holiday rush is over, the flood of returns can overwhelm retailers. In fact, 31% of shoppers are planning ahead for the inevitability of returns with bracketing—making multiple gift purchases with the confidence that they’ll be able to return later. Retailers should aim to reduce returns with more accurate inventory promising. By ensuring stock levels are accurately reflected, you can set the right expectations for shoppers, reducing the chances of order cancellations and returns.

During the holiday season, retailers often face a combination of challenges that hinder fulfillment efficiency. Legacy order capture systems may struggle to scale, causing slowdowns and errors. These outdated systems often lack the flexibility and automation needed to handle high order volumes. This makes it challenging for retailers to meet expectations for fast, accurate fulfillment, ultimately impacting sales and customer loyalty during the holiday peak. Consumers now demand seamless, efficient and transparent transactions, with clear communication that their orders have been accepted and will arrive on time. Website crashes during high-traffic events or the failure to receive timely order confirmation can leave customers uncertain about whether their purchase will be fulfilled.

With soaring customer expectations and an unpredictable surge in orders, a robust, modern order management system (OMS) is crucial to your business’s success this holiday season. The right OMS can streamline order processing, optimize inventory management and improve customer communication, all while minimizing errors and delays during the busy shopping period.

Order volumes processed on time and pushed to the warehouse are essential to avoid delays that disrupt the shopper experience. Retailers depend on accurate API calls to display real-time stock availability so that shoppers get an accurate picture of what they can purchase, boosting trust in the retailer.

A modern OMS will display key KPIs to help you track order volumes, especially during the post-Thanksgiving spike as shoppers flock to Black Friday deals. It will capture this data in real time and provide immediate insights across various KPIs, such as:

• Items ordered: Volume of holiday items handled by the OMS. Each item represents a single product being managed, including demand management, optimized sourcing decisions, fulfillment orchestrations and status management.
• Total inventory inquiries: Volume of calls for information about inventory availability and supply updates, served to the ecommerce front end including web, mobile, social and store. Each call provides real-time supply-demand mapping, granular inventory visibility and delivery date promising.
• Total API calls: All API volumes handled, including supply updates, item availability and inventory promising calls across the customer and order journey.
• AI-optimized order lines: Number of lines sourced through the AI engine, optimized with real-time demand signals and inventory level predictions.

Let’s see how IBM Sterling OMS is supporting retailers this shopping season with real-time order volume data from our systems, with insights into application performance and infrastructure health powered by the Instana® observability platform.

In the screenshot, there is a huge peak in order volumes for Black Friday with 4.5X the normal order volumes per day.

The OMS is scaling seamlessly to support order peaks managing over 42 million lines and a load of 6 billion API calls over 7 days (Nov 27th to Dec 3rd) and clocking speeds of 180 orders/sec.

The scale of API calls illustrates how IBM Sterling OMS can scale to ensure that retailers are providing customers with the accurate, real-time information they need to make holiday purchases.

On the inventory side, our microservices powered 16 billion transactions over the past 7 days (Nov 26th to Dec 3rd), at a peak rate of 62,000 transactions per second (TPS). Furthermore, the impact of AI is shown through 25 million order lines that are being optimized with our AI engine, meaning that these orders will likely lead to higher profitability for retailers.

You can see that the right OMS can seamlessly handle seasonal spikes while ensuring the profitability that is crucial to retailer success. It helps maintain margins by optimizing inventory, reducing errors and improving fulfillment speed. Putting a flexible, composable and scalable platform at the core of your architecture empowers your business to stay agile and responsive, driving growth and adapting quickly to changing market needs and seasonal shifts.

Learn how IBM Sterling OMS can help your business this holiday season