Consumer demand for products fluctuates depending on seasons, occasions, and customers’ interest in products.

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Customers splurge during the festive season, but there is a relative draught in orders during other times. An increase in consumer demand for your products presents an opportunity to boost ecommerce sales and revenue. However, this comes with the danger of storing too much inventory and spending too much on operational costs. Thus, inventory needs to be managed properly.

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You must be wondering how ecommerce sellers can manage seasonal demand to ensure seamless fulfilment without the danger of overstocking and inventory becoming obsolete. Fortunately, it is possible through efficient inventory management. Let’s see how ecommerce sellers can overcome potential challenges to take advantage of seasonal demand.

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In this blog, you will learn what seasonal demand is, the causes of seasonal demand, how it impacts ecommerce brands, and how you can ace seasonal demand to ensure cost-effectiveness.

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What is seasonal demand?

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Seasonal demand refers to fluctuations in demand for a product due to changes in customer’s purchasing habits. Seasonal demand reflects changes in customers’ interest in products at a particular time.

For example, the consumer demand for jackets rises during winter, while the demand for sunglasses increases during summer.

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What are the causes of seasonal demand?

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Seasonal demand is caused due to two major reasons:

1. Changes in season (summer, winter, autumn, and spring)
2. Special occasions (festivals such as Diwali and Christmas)

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The demand for products changes as the seasons change (the demand for umbrellas is very high during the rainy season) and around special occasions (like during the festive season). Multiple ecommerce brands ramp up marketing activities and launch sales and exciting offers during the peak season, which lure customers to purchase more.

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How does seasonal demand impact ecommerce brands?

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While seasonal demand fluctuations can be difficult to manage for an ecommerce business, they are also beneficial as they can create lucrative business opportunities. Let’s take a closer look at how seasonal demand impacts ecommerce brands.

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The benefits of seasonal demand

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With proper planning, seasonal demand can have multiple benefits for you, such as:

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1. Opportunity to maximise sales

As consumer demand for products rises, you can take advantage of this increased demand to boost ecommerce sales. Moreover, you can improve Customer Experience (CX) to retain shoppers in the long run, as research shows that 44% of customers become repeat purchasers after a personalised experience.

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2. Predictable nature

As seasonal demand is predictable in nature, it is easier for ecommerce sellers to plan fulfilment, stock up on appropriate inventory levels and ensure lightning-fast shipping. You can also plan your marketing strategies around seasonal demand to reap the maximum benefits.

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The challenges of seasonal demand

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Seasonal demand also brings certain risks and challenges which can be detrimental, such as:

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1. Stockouts

If not adequately prepared, ecommerce brands can lose out on sales opportunities if they don’t have enough inventory to meet the increased consumer demand. For example, you receive ten orders but only have the inventory to fulfil nine. In this case, you would have to cancel one order leading to a missed sale opportunity.

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2. Overstocking

You may anticipate a high order volume and overstock to prevent stock-outs. However, overstocking does not bode well for an ecommerce business, as excess stock can become obsolete. Moreover, overstocking increases operational costs as you need to lease more storage space to maintain inventory.

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3. Logistical challenges

Suppose your order processing capabilities are slow and lack automation. In that case, you may find it difficult to process orders on time- leading to delays in delivery and customer dissatisfaction. Moreover, the festive season experiences severe traffic conditions, which can delay shipments.

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4. Customer Experience

Ecommerce sellers may overlook Customer Experience (CX) while struggling to fulfil bulk order volume. For example, you may improperly pack an order which can cause in-transit damage.

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How to ace seasonal demand?

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Ecommerce brands can take advantage of the prime shopping season by thoroughly planning for fulfilment. Let’s see how:

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1. Forecast consumer demand

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By forecasting consumer demand, you can know how much inventory would be required to fulfil orders. Forecasting consumer demand is crucial to ace seasonal demand as it helps prevent overstocking and understocking. You can use historical sales data to analyse when demand spikes or goes down to plan accordingly.

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2. Use an Inventory Management System (IMS)

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An IMS simplifies inventory tracking and replenishment and helps prevent stock-outs and overstocking. Most importantly, an IMS provides data at the SKU (Stock Keeping Unit) level and helps examine historical sales, bestselling products, average daily orders, and more.

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3. Keep suppliers informed

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You may need more inventory at short notice, as demand forecasting only gives an approximate idea of required inventory levels. Thus, staying in touch with your suppliers and determining lead times is beneficial so that you don’t miss out on any sales opportunities due to products not being in stock.

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4. Streamline order fulfilment

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Ecommerce sellers can plan to efficiently fulfil the increased order volume by establishing SOPs (Standard Operating Procedures) for shipping orders. Additionally, you can also introduce automation like conveyer belts and RFID tags in order processing as it reduces errors and speeds up fulfilment.

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5. Use scalable ecommerce warehouses

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You may require extra storage to maintain inventory and more manpower to process orders during seasonal demand. Ecommerce sellers can rent more ecommerce warehouse space or consider on-demand warehousing. You can also use the scalable fulfilment infrastructure of 3PL (Third-party logistics) like Eshopbox.

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6. Focus on customer experience

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During hikes in consumer demand, it is important for ecommerce sellers not to lose sight of providing a memorable customer experience as it helps drive repeat purchases. You can create a memorable customer experience through the following:

• Using custom packaging
• Providing order tracking details
• Send proactive post-purchase notifications
• Ensuring quick shipping and delivery

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7. Consider partnering with a 3PL

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Partnering with a 3PL (Third-party logistics) during a period of increased seasonal demand is beneficial for ecommerce sellers. Ecommerce logistics providers take care of customer experience and deploy extra resources to meet the increased demand.

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Stay on top of seasonal demand with Eshopbox

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Eshopbox is an ecommerce logistics provider that can help you manage seasonal demand easily and effectively. Here is how Eshopbox helps you stay ahead in the ever-competitive ecommerce landscape:

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• Eshopbox provides powerful insights at the SKU level to help you determine seasonal demand fluctuations.
• You can use Eshopbox’s robust IMS to track inventory in real time and maintain adequate inventory at all times to plan inventory reorders and prevent overstocking.
• Eshopbox provides automated and proactive inventory replenishment reminders to prevent stock-outs.
• Store inventory in Eshopbox’s distributed network of fulfilment centres and ensure ultra-fast shipping with a 99.65% order accuracy rate.
• Eshopbox empowers you to provide a memorable customer experience even during seasonal spikes by delivering the best post-purchase experience.
• Notify Eshopbox about an upcoming rise in order volume, and Eshopbox will expertly handle seasonal spikes by allocating fulfilment infrastructure based on your requirements.

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Summing up

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Seasonal demand brings with it the opportunity to tap into consumer demand and generate more ecommerce sales and revenue. Moreover, the predictable nature of seasonal demand makes planning easier. The right strategies and expert 3PLs like Eshopbox can help scale your business during an uptick in seasonal demand.