Gearing Up for the Holiday Rush (1,954 words)
It's not beginning to look a lot like Christmas just yet, but retailers know the importance of preparing early. With 1999 holiday shoppers spending an average of $1,080 on gift purchases, the sheer numbers can be daunting. Now is the time to gear up.
"Gearing up" can mean lots of different things, from accepting orders on the Web; to dealing with customers over the phone; to delivering packages on time. There are several details to tend to long before you hear the first Christmas carol.
Have a look inside some successful operations to learn how to begin.
Christmas is Its Business
Collin Street Bakery, a Corsicana, TX-based company in operation since 1896, knows the importance of direct marketing with a personal touch.
Selling nothing but (gulp) fruitcakes year-round, Christmas is the cornerstone of Collin Street's business. The direct merchants ship 100,000 packages a day in the weeks preceding Christmas Day. Two distinct business models emerge, with different modes of operation during in-season versus off-season. And since it's been using direct mail successfully for 104 years, customer service is integral to what it does. But finding increased staff for only part of the year is a major concern, says Collin Street officer Bob McNutt. Unlike other marketers like Lands' End, which has forged ongoing partnerships with other seasonal employers in the area, Collin Street relies on less formal methods to prepare for the busy season, McNutt says.
"We employ 85 people year-round," says McNutt, "and when we gear up beginning in October we go to around 700." People are needed to man the phones in the call center, for front-end production (as bakers and decorators) and back-end production (packaging) work, front office staff who open and sort the mail, as well as people to oversee Web operations. McNutt says Collin Street relies on its strong community ties to find reliable employees. "It's a small town, and we get quality people," he says.
Since Collin Street prides itself on quality, cutting corners on product is not an option. Says McNutt: "It's a gourmet product that just happens to be a fruitcake." To wit, the whole preparation process requires about five hours per cake, from baking to hand-decorating.
Homemakers and students are good sources of part-time employment, McNutt says, but he points out that changes in the economy can make this process somewhat unreliable.
"It was a particularly large problem this year because unemployment in the area was at an all-time low," and people weren't scrounging for spending money as they often are, he says.
One key to ensuring sufficient call center coverage during the seasonal rush, advises McNutt, is to use both in-house and outsourced systems. Collin Street has 77 reps handling inbound calls in its call center, but allows overflow to be handled by an outside center. "You have to have these resources available," stresses McNutt. Juggling the shift between in-house and outside telemarketing can be a challenge.
Liz Kislik, president of Liz Kislik & Associates and call center consultant, concurs, with one caveat: You must find an outsourced agency that can handle requests in a "reasonable facsimile" to the way you do business in-house, she says. If your outsourced reps don't have the same access to inventory information the way your in-house people do, she says, you'll only create future headaches.
"It's all cyclical. If you start off badly, you'll end up stuck in a bad cycle, and vice versa," she warns.
For direct marketing pioneer Collin Street, the dawn of e-commerce was just a new way to receive orders, says McNutt. From there, "We've already got a 104-year-old back-end system in place," he says.
But the globally-accessible system was a great help to the company's sizable international customer base, says McNutt. One snag commonly hit by mailers who send packages overseas is misunderstanding foreign addressing methods, he says, and this problem is avoided when the customers can enter the address themselves. This opportunity is available on the company's Web site, which, says McNutt, has both changed the nature of the orders they accept from more than 200 countries as well as increased them.
So how does Collin Street continue to live up to the high standard it set back in 1896? McNutt says, "Ultimately, we attribute our success to the people behind the automation."
The Online Model
Lands' End, a leader in the direct selling industry, successfully implemented online sales on both the front- and back-end during holiday 1999. Launched in 1995 with 100 products, www.landsend.com now features every product found in its catalogs. Its server is equipped to handle huge traffic volumes—if you're counting, that's 15 million site visits in fiscal year 1999.
How do they do it? According to Lands' End director of e-commerce Sam Taylor, the specific challenges of retailing during a rush time aren't terribly different for a brick-and-mortar company once it gets online. He sites three areas of concentration: 1) the product itself; 2) human resources; and 3) the Web site.
1. Product. Lands' End begins making its merchandising decisions over a year in advance for the holiday season. The company's customer retention and wealth of database information affords it the confidence to choose products that will be popular, he says.
Taylor emphasizes that the product selection on the Web site is identical to the array of goods found in the company's catalog; he says this "total overlap" is an important part of strong brand identity.
2. People. Lands' End reports it typically does 40 percent of its business during the fourth quarter, but this isn't without a hugely increased need for space and employees.
Taylor says, come March, the company is already hiring for its call center needs for the next holiday. During the holiday rush, the number of calls received by Lands' End reps jumps from around 40,000 a day to more than 100,000 on the busiest days.
An additional 2,500 people are also needed to fill customer service, distribution and packing positions, Taylor says.
Where can you find the means for seasonal increases in manpower? A strategic partnership may be the answer. College students and people involved with other seasonal work can be a great resource. Lands' End takes advantage of local resources by partnering with cheese factories in the area, which end their busy season in October, when the retailer begins its busiest time of the year.
3. The Web site. "We pride ourselves on being online pioneers," Taylor says, and by adding an exciting new feature to the site each year, the company manages to stay ahead of the game.
Server capacity and site performance are major issues during an online rush, Taylor says. The Keynote Group ranked LandsEnd.com as one of the top sites leading up to last year's holiday season. Most important for Web applications, Taylor says, is a seamless integration: "All operations are joined at the hip. Once it gets to the back-end it's all the same."
Fulfillment: The Big Challenge
As online retailers (and shoppers) are well aware, even established direct marketers hit some serious snags when it came to fulfillment and customer service on the Web during the 1999 holiday season. According to a study by Andersen Consulting, the number one gripe 1999 holiday online shoppers had was "product was out of stock."
Lands' End's promise to take and fulfill orders by Christmas day up until 10 p.m. on December 23—and its ability to make good on the promise—begs the question: How did they do it? In a season when the e-commerce newbies were painfully finding their legs, how did this direct merchant succeed?
Taylor says that it is the company's unique partnership with UPS that allows it to keep its grand fulfillment promises. With a main UPS mail drop center located directly at Lands' End's distribution center in Dodgeville, packages come off the five miles of fully-automated conveyor belts ready for pick-up.
Taylor reiterates that many of the most pressing challenges for retailers are the same online as they are in the brick-and-mortar world.
"Today most e-tailers don't have their own back-end systems. Land's End has that, as well as its own call center. If you're a new e-tailer, you have to build [these systems] yourself, or outsource them." Bottom-line: A Web site may be easy to build, but an online business takes a lot more effort.
Prepare the Troops for Battle
Providing solid customer service is a huge issue for direct merchants—and one that's particularly sticky during the holiday rush. Do the challenges of manning a call center differ seasonally? Yes, says Liz Kislik.
She says the seasonal call center population can serve two purposes: 1) to cover the surge of the peak period; and/or 2) to ready a workforce you can draw from for subsequent peak periods or as full-time reps.
Proper training is fundamental to producing efficient employees, Kislik points out. Unfortunately, she says, "It's very common—though not good—to have the training period truncated or telescoped" during the holidays.
To avoid this error, it's useful to try training new staff on easier duties, such as catalog requests and straight orders, she recommends. Try a phone system that automatically routes simple calls to new reps, and leave difficult tasks, such as back-order check-ins, to reps with more experience.
If you must abridge your training period, says Kislik, go for a lab-oriented, rather than a lecture-based, approach. Although difficult in terms of time, space and resources, alternating short periods of training with even shorter periods of hands-on learning in the call center itself is a valuable approach. You'll get them over the learning curve quickly, she says, if you flip between "real-live and follow-ups of debriefing and coaching."
A major reason reps are lost during this time of year is because they are poorly trained and then thrown to the wolves on the call center floor—what Kislik calls "equivalent to a developmental sin."
"Whatever your methodology, you need someone skillful as a monitor," Kislik says, adding, "Intentionally disrupt your seating plan" and place a trainee between two senior reps in case she hits a snag along the way.
And what about automation of the call center through Web integration? The most important thing is to provide a variety of response mechanisms so that customers can interact with reps in whichever way is most comfortable, says Kislik.
Keep Them Motivated
Kislik says that "the in-season of a call center is often like an emergency room"; people are particularly subject to burn-out.
To keep your call center staff (particularly the beleaguered TSRs on the front line) stress-free, Kislik recommends keeping "a lot of arrows in the quiver." In other words, provide a variety of stress-relieving techniques. These can include frequent breaks, fun food, a nap room and stress-reducing techniques like stretching.
Lands' End customer service reps handle some 10,000 calls per hour and process around 100,000 orders daily during the holiday rush, yet the company has a solid reputation for keeping its workers satisfied and motivated. Fortune magazine's annual Top 100 Places to Work survey ranked Lands' End high among America's workplaces because it's able to retain employees in an industry plagued by high turn-over rates.
Some creative techniques the company has successfully employed include: "States Bingo" which awards reps for making sales all over the country; "peak points" of $1 each awarded to reps who arrive early to work, stay late or pick up an extra shift; stress-relieving massages; and other fun events like theme parties.
And although it seems basic, says Kislik, a key point in reducing stress is reducing fear: "Don't have supervisors walking around like it's Doomsday!"
Put the time in now, and your holiday retail season really will be the most wonderful time of the year.