Consumer and market trends

How to ensure agile logistics at Christmas without bringing Santa to his knees

As the festive season approaches, households around the world prepare for one of the most exciting times of the year.

On December 20, 2023

Yet, behind this time of celebration, complex logistics come into play to ensure a smooth holiday period. Are you ready for a successful Christmas season in 2023?

During Christmas, consumption soars. People buy presents for friends and family but also food for festive meals. According to Kantar, consumers buy, on average, 10 % more items than a typical month. If consumers are expected to take a cautious approach to spending this year, mainly concerned about inflation and the complex geopolitical situation, most of them try to preserve the magic of the season. This year, French consumers expect to spend on average 549 euros for Christmas, a budget that is 19 % less than in 2022, but has been stable over the past seven years (CSA). More importantly, they plan to buy the same number of presents (7 presents, stable since 2019.). And not surprisingly, online shopping is expected to remain important.

What challenges does Christmas logistics involve?

One of the main challenges in Christmas logistics is the significant surge in demand, both online and offline, which puts immense pressure on the entire supply chain. As many consumers still wait until the last moment to buy their present, last-minute orders need to be processed, packed, and shipped in a very short delay. More workers and loading space are required to manage the additional volumes of goods during this peak period. However, there is a labour shortage in the transport and logistics industry. For example, Germany lacks 80,000 to 100,000 truck drivers (source: Metro Logistics). Growing orders also often mean more returns, especially for online orders, which requires logistics players to allocate extra space and staff to manage this reverse-logistics.

How to successfully execute Christmas logistics?

Whatever happens during the Christmas period, one thing is clear: companies need to be prepared in advance and ensure that the required infrastructure, technology, and staff are in place. Here are some useful advices to succeed during this hectic period:

Advanced Forecasting and Planning – By analysing historical data and market trends, companies can anticipate the demand for specific products, allowing them to adjust inventory levels, production schedules, and distribution plans accordingly. Thanks to early planning, they can minimise the risk of stockouts and ensure optimal resource allocation. In one word: be more efficient.

Expanding Warehouse Capacity – Companies can accommodate the increased inventory levels and seasonal workforce with a larger warehouse capacity. This helps prevent stockouts, ensures product availability, and provides the necessary flexibility to manage peak season fluctuations.

Optimising last mile delivery – During Christmas, customer expectations for timely and reliable deliveries are exceptionally high. To guarantee delivery before Christmas, companies must be adequately prepared in advance, with the right service providers to ensure timely completion of the last mile.

Leveraging technology – With the right technology, companies can boost their operational efficiency and limit the risk of errors, a critical factor during peak seasons like Christmas. To streamline processes and minimise the likelihood of mistakes, companies can use Order Management Systems (OMS), Automated Sorting and Picking Systems (ASP), Warehouse Management Systems (WMS), Demand Forecasting Tools, and Route Optimisation Software.

Implementing an omnichannel supply chain*: Throughout the Christmas season, orders come from multiple sales channels, both online and offline. Businesses equipped with a streamlined omnichannel supply chain can offer competitive logistics service. They will gain from improved inventory management, increased flexibility in order fulfilment, enhanced operational efficiency as well as better customer experience.

Adopting sustainable practices – As environmental concerns grow, integrating sustainable practices into Christmas logistics is becoming increasingly important. Companies can explore eco-friendly packaging options, optimise transportation routes to reduce emissions, and adopt energy-efficient technologies. However, the need to speed up delivery times for latecomers can’t always meet this expectation.

Christmas season is a critical time for companies. By working closely with your logistics partner, you can address the challenges of this peak season more efficiently and ensure that all the presents arrive under the Christmas tree on time!