Modern Retail

How to Scale E-Commerce Operations up and Down as Required

scale e-commerce operations

In the past, many e-Commerce operations had to make drastic changes to cope with peak periods and the fluctuation in amounts of orders. Moving forward, as our world becomes more connected through online ordering – especially after the whirlwind that was 2020 with the pandemic and Brexit, making drastic changes for each peak period is going to be laborious and take away too much time from running successful e-Commerce operations. Therefore, there are ways that e-Commerce operations can scale up and down as required to manage the changing demand in real time.

One of the easiest and most important ways that an e-Commerce company can scale up and down to manage changing demand is to work with several logistics companies to ensure timely deliveries. When it comes to supply chains, we know that there’s a really robust carrier logistics network in place across the UK and by working closely with several of these carriers, e-Commerce businesses can scale operations up and down as needed to meet changing demand during peak periods.

As we have seen over the past few years, there is an increased demand for online shopping, and with the ongoing pandemic, this has reached levels never seen before and will continue to grow moving forward. Companies that have been able to survive and thrive during recent unprecedented demand for online orders are the ones that have worked with multiple carriers to ensure timely and efficient deliveries.

e-Commerce demand forecasting will become more important than ever, as retailers cannot afford to be over or understocked as the industry continues to work through the pandemic. e-Commerce demand forecasting is the process of predicting future demand for products – either new products, or popular items you’ve been selling for years. The best way of forecasting demand is normally by looking at historical data, which is where the challenge now lies after the fluctuating year e-Commerce saw in 2020.

Due to the fluctuations in demand throughout 2020 for many retailers, long-term demand forecasting isn’t possible – however, short-term demand forecasting can still be done. Using the last quarter of 2020 is a great benchmark for many companies, as they saw an unprecedented peak in online ordering that will most likely be similar to peaks experienced this coming year. This will allow for e-Commerce businesses to ensure they have enough stock during peak periods, and can fulfill orders in a timely manner. It will also help ensure they are not overstocked at times where there is a lull in business, guaranteeing extra costs are not being expended.

There are several benefits to demand forecasting for businesses, including helping to reduce financial risk, providing customers with the products they want, decreasing inventory expenses, and creating a pricing strategy that reflects demand. If e-Commerce companies can understand the changes in customer demand, they will better be able to plan financially, decreasing risks they may otherwise take – specifically with inventory. This can lead to decreasing inventory expenses, which is the ideal outcome for any business. With demand forecasting, a company can safely have the right amount of stock on hand for all peak periods, with no wasted space or slow moving stock. This can be repeated for all upcoming peak periods, which would maximise warehouse management.

The last year has been one of unexpected changes to the e-Commerce industry. The shift towards online ordering had been growing over the last several years, but the pandemic propelled this side of the business forward at rates nobody could have predicted. For this reason, many e-Commerce businesses were not able to cope with the peaks and troughs of the online business last year without overhauling the entire business. Overhauling the business to manage changing demand can have more detrimental effects on the e-Commerce industry than positive, and therefore e-Commerce businesses must focus on how to scale operations up and down as required without having to make drastic changes to the business model every peak period.

There are many steps that e-Commerce businesses can take to scale operations up and down without having to make drastic changes for every peak and trough faced, but the most important steps are demand forecasting, and by working with multiple logistics companies to guarantee timely and efficient deliveries. Both of these steps will help grow the customer base, as well as ensure the business survives unprecedented peak periods of business. Having to completely overhaul your business to meet changing demand is a thing of the past.

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Rory O'Connor

Rory O' Connor, is the founder and CEO of Scurri. Since launch Rory has focused on building and leading an impressive team of highly experienced technologists and advisors. Rory has won significant investment for the software business, raising over €7 million investment from private individuals, business angel investors and Enterprise Ireland.

Prior to founding Scurri in 2010, he worked in various roles in Waterford Wedgwood, in sales, marketing and strategic project roles including being part of the team that delivered a €10m SAP implementation.

Rory subsequently worked as a change management consultant with clients such as Heineken, Intel, Ogilvy and Siemens and as a project manager with AOL broadband. Rory has a number of business qualification including holding an MBA from Henley Management College.