The e-commerce business comes with its own set of challenges and opportunities. One of these is the summer, commonly known as the Summer Slump, which can temporarily change the way logistics operates.
Online retailers spend, on average, 11% of their turnover on logistics. Therefore, in parallel to their growth, which is expected to reach $650 billion by 2025, the industry can expect to see increases in economic activity.
However, just as the sector benefits from the good side of these dynamics, it also suffers from the negative externalities derived from the particularities of this business.
We are talking about the Summer Slump or the e-commerce slump inherent to the summer season.
What is Summer Slump?
During the summer, many of the retailers that nurture and require the services of logistics and transportation experience lower conversion rates, with lower customer engagement and a high number of cart abandonments.
This is known as Summer Slump, a phenomenon that takes place during the months of June, July and August.
Seasonal changes and holidays mean that the main attraction for these businesses is precisely during the sales. However, in the face of the margin squeeze that this entails, logistics is forced to prove its essentiality.
For 53% retailers, the supply chain is a significant challenge and, precisely in the face of this vision, it is up to the ecosystem players to come forward as the perfect allies.
How to avoid the summer e-commerce slump?
While this slump is a problem for everyone, businesses can adjust their operations to minimise or avoid its impact. To do so, they must make some changes that make it easier to maintain customer engagement and support conversions to maintain sales.
So, while some companies are trying to deal with this downturn, it is possible to continue to grow business over the summer.
1. Improve the customer experience
One of the ways to overcome the Summer Slump is to improve the customer experience. Reducing friction in service delivery, improving strategies or streamlining operations adds value for end users.
In addition, optimising these metrics provides customers with new arguments for maintaining inventory levels and thus service levels.
While customer experience is critical to maintaining existing customers, there may be times when it is unavoidable that some users will need to reduce or drop their demand. Operators can take advantage of this time to fix those internal parts of their business that need intervention before the end of the summer.
2. Focus on retention
Another way to overcome the negative externalities of this period is to focus on retention. Ensuring that customers are happy with services is essential to keep them coming back to your logistics provider. Retention is an excellent way to secure the revenue that will sustain operations during these months.
In addition, summer is the perfect time to test new features, products or services that existing customers want. This fall, therefore, can be presented as an opportunity to find out what they are interested in and deliver to increase customer loyalty.
3. Develop infrastructure
The potential summer slump in e-commerce is one of the most challenging situations for retailers and logistics companies managing their inventories. It is therefore important to understand the reasons behind this downturn and to take all appropriate measures to overcome it.
To facilitate this adaptation, it is essential that logistics providers have and invest in having the right infrastructure to make it work. We are talking about machinery, personnel and, above all, space.
It should be recalled that, according to Knight FrankIt is estimated that, for every billion online sales, retailers need 126,400 square metres. However, the most important thing in the face of such changes, as experts point out, is to ensure resilience through flexibility.
Logistics services, in and of themselves, are no longer an expense but a competitive advantage. However, in the face of changes in some of its verticals, such as e-commerce at this time, it is up to them to demonstrate their ability to adapt and survive.
