Predicting the holiday retail season is always done with a degree of uncertainty. As we head into 2025, the Consumer Confidence Index® shows a slight increase in market confidence, although consumers remain anxious overall. Preparing for the unpredictable is one of the best ways supply chain businesses can excel during peak season fluctuations and beyond.
We studied trending outlooks based on reports by the National Retail Federation and S&P Global and we created a plan of action to help reduce your stress and increase success. Get into gear now for holiday challenges.
Expect a Longer Holiday Season
Despite consumer groans when holiday merchandise appears alongside summer clearance, the holiday season continues to expand. Consumer online spending during November 2023 increased by 7.3 percent from November 2022, with Cyber Monday increasing almost 10 percent from 2022.
The pandemic triggered a trend in earlier holiday seasons—more time to enjoy; spread spending; and, for those in the supply chain, more time for order fulfillment. This extended time can help you maintain balanced staffing levels during what would usually be filled with last-minute and potentially less-qualified hires. Partner with an agency that has a pool of experienced staff at the ready to accommodate the ebb and flow.
With Eclipse’s expertise in unloading dock services, they’ve seamlessly streamlined our operations. We are expanding our partnership with Eclipse to include another distribution center. We appreciate their hard work and dedication!
— Larry | Director of Operations, Wilson Sporting Goods
How to Prepare
Plan for a Longer Peak Season
In the supply chain industry, Christmas in July may be a reality! Both online and in-store shipping trends are expected to spike this year, starting in October. Longer peak seasons allow more manageable operations through scenario planning.
Consider investing in a comprehensive inventory management system to accurately monitor stock across all channels. This will greatly reduce inventory discrepancies and allow real-time inventory visibility. Then, stock your warehouse accordingly. Perform random inventory audits, physically spot-checking shelves, to ensure reality aligns with existing inventory records. Meticulous inventory management allows warehouse preparedness based on trustworthy data.
Use Automation & A.I.
Warehouse management software can provide instant visibility with adequate time for pivoting. Today’s advances in A.I. offer insight and actionable analytics based on real-time information. Consider a staffing partner who can implement an A.I. warehouse management system to help analyze and predict outcomes, such as bottlenecks.
The use of automation can increase efficiency and accuracy when used to complement your human workforce. For warehouse managers, it allows time to focus on more strategic tasks. If integrating automation at your warehouse, allow an adjustment period before peak season hits. Ensure hires are trained in the latest developments in A.I., such as collaborative robots, to optimize workflow and maximize productivity, reducing peak season volatility.
Map it Out, Again
Create alternate shipping routes to prevent delays as we navigate through increasingly unpredictable climate events and global relations. Seek different modes and combinations of transportation like air/sea and road/air solutions.
Demonstrate Sustainability
Holiday shoppers will continue hypervigilance on businesses’ sustainability, including in the supply chain, perhaps even more during the season of goodwill. Beyond the supply chain system’s environmental impact, the world is taking a deeper dive. Globally broad initiatives are being considered during business transactions, including a company’s respect of human rights and abolition of child labor.
Maintain Resilience
Peak season is always a challenging time for warehouse managers; however, by remaining agile and adaptive, you can minimize stress associated with the holidays. Take advantage of the technology available, like warehouse management software and automation devices (i.e., collaborative robots), while prioritizing your human workers. As a team, you can best navigate inventory issues, fluctuating consumer behavior, and unforeseen global-trade dynamics. Together, you can be ready for hectic holidays—because Santa doesn’t deliver by robot yet.
What’s great about working with the Eclipse team is that they are truly an extension of our company. They are on-site and so their only business is knowing our business. They are always responsive to our needs day or night. They try to rectify problems both small and large so I don’t have to worry about it. They make my job as an Operations Manager much easier by taking staff management off my plate. I couldn’t do it without them.
— Christine | Operations Manager, North American 3PL
What Keeps Workers Around?
Article upon article and report upon report state the same facts, blue-collar workers have increased expectations in what they want out of a job. The top factors motivating these workers are:
- PAY RATES
Pay rates continue to be a big driver of job choices. Consistent pay increases are the second-most-important factor employees consider when choosing a job. - FLEXIBILITY
Shift and schedule flexibility, while always important, have risen to even higher levels of importance today — representing one of the top three factors for staying on a job. - CHANCE FOR ADVANCEMENT
The opportunity for advancement is a significant motivator in keeping workers engaged, motivated, and productive. Moving into management ranks can help keep employees engaged while also offering benefits for your company. - COMPANY CULTURE
Culture matters to employees. Focusing on culture creates a positive working environment. Working together as a team creates experiences that resonate and reward.
Addressing the Challenges
So what can harried operations managers do to be poised for proficiency this holiday season? We’ve identified some best practices that can help you ride out this holiday season if you act on them now.
Get Your Warehouse Workers on Deck Now
Traditionally, many consumers procrastinate and last-minute holiday shopping prevails, however, things are trending a bit different this year. In fact, McKinsey predicts that consumers will start their holiday shopping early to avert any potential problems buying the things they need.
The holidays—and seasonal holiday demand—will be upon you before you know it, especially with consumers indicating that they plan to start their holiday shopping early this year. Take steps now to ensure that you’ll have the warehouse workers you need to ensure trucks can be unloaded efficiently and cost-effectively.
Increase Efficiencies in Your Operations
Operations leaders always seek opportunities to gain efficiencies at every step along the supply chain. Continuous improvement is an evergreen mantra that remains a top focus. Unfortunately, sometimes supply chain operations work at cross purposes, as we’ve seen. For instance, when workers are paid by the hour, they’re actually disincentivized to work more productively.
As the Eclipse IA CEO explains in the article Industrial Athletes for the Modern Supply Chain:
"In the commodity model, warehouse workers are paid hourly. Their goal for work is to be there for eight hours, then go home. The temptation is to be less productive and get more hours, and the warehouse pays more for less work.
To make up for that loss, employers hire additional commodity workers, who are also getting paid more for less work. The impact on the bottom line is the equivalent of driving in the wrong direction, but faster."
Encouraging Productivity Through a Cost Per Unit Model
Instead of a commodity model, a Cost Per Unit (CPU) model employs a team-pay structure that incentivizes workers to meet collective goals and allows them to earn more.
Additional Operational Efficiencies
Other operational efficiencies to consider include:
- Look at your processes for loading, unloading, picking and packing.
Are there opportunities to remove steps, or eliminate waste from these processes? Could the layout of your facility and loading docks be optimized for greater efficiencies? - Analyze your workforce.
Does it make sense to use your own workers, or would it make more sense—from both a cost and productivity standpoint—to outsource? Should your focus be on managing workers—or running the most efficient operations? - Consider ways to streamline last-mile delivery.
For instance, what impacts might a zip sortation site have for your operations?
The impacts of efforts to increase efficiencies can be striking. For instance, we worked with a major eCommerce company to start up a zip sortation site for last-mile delivery. To ensure a minimum of 400 reliable workers for go-live, we recruited, screened, and made offers to 900 candidates. During the one-month ramp-up period, Eclipse IA hired 30 qualified workers daily for 30 days while maintaining an ongoing waitlist of potential applicants eager to join the team.
This was no simple task, but our efforts went beyond simply having workers on site to ensure these workers were operating at peak production through our unique productivity pay workforce model. The results: these workers processed 1,425,000 packages on average, each month, with 99.8% accuracy. And, this scalable-startup framework can easily be replicated anywhere else in the country.
Manage Holiday Staff With a Strong Partner
Experienced operations managers know that the hardest part of gaining efficiency is people logistics. To improve your management here, address issues such as:
- Do you have the quality and quantity of staff on deck to meet holiday demand?
- How can schedules be flexible to handle peak demand, shifts in demand, or the unexpected--e.g., weather-related travel events?
- How can you get and keep workers engaged and motivated to maintain productivity?
- How can you balance costs and output to maximize ROI?
These are critical issues that fall directly into the laps of operations leaders tasked with finding opportunities to overcome emerging supply chain challenges--and to do it during the busiest time of year for shippers.
Avoid Being Stretched Too Thin
Operations managers are very busy and charged with critical aspects of managing operations to ensure customer needs are met efficiently--and cost-effectively. Their expertise is in logistics and process management--and not, necessarily, people management and motivation.
While people are obviously a critical part of the process, people management often pulls operations leaders away from areas of strategic impact where they are uniquely positioned to provide real value.
The best solution to address supply chain bottlenecks this holiday season is to outsource the most difficult challenge you face every day—finding, onboarding, training, motivating, and retaining top-quality workers who come together as a team to achieve maximum efficiencies. All, while also controlling costs and being able to forecast expenses accurately.
You can take the uncertainty out of the staffing costs equation while, at the same time, ensuring a high level of production. Having a fixed-cost model to handle your warehousing needs this holiday season protects your margins while motivating your people.
Managed service takes away the headaches of managing workers while providing guaranteed results:
- Better source of qualified staff.
- Predictable costs.
- Greater staff engagement and productivity.
- Better output.
- Better chances of meeting customer demands despite supply chain bottlenecks and uncertainty.
How Eclipse IA Relieves Your Burden
We provide incredible Cost Per Unit managed teams that subscribe to strong core principles of teamwork. We focus our wages on performance for:
- Productivity
- Retention
- Fair compensation
- Leadership
- Morale and culture
Cost Per Unit Explained
How does a CPU model work? Each person on our teams are paid the same wage, and as the team becomes more efficient and productive, the pay rate increases while customer costs remain static. The model works because it is in everyone’s best interest to get the entire team to be as productive as possible.
In a traditional hourly payment model, workers are incentivized for the amount of time they put in. When unloading a truck, for instance, the longer it takes the more they’ll be paid.
But when you flip this model and, instead, pay people on a Cost Per Unit basis, or $X for every item or box they unload from a truck, it doesn’t matter if it takes them 10 minutes or 10 hours. The more they unload, the more they make.
That provides a significant benefit—and a big incentive—for them. It also provides a considerable benefit, and peace of mind for our clients.
Under a Cost Per Unit model, you know exactly what it will cost to have a product unloaded.
Paying for Performance Is Not New - and it Works!
Paying workers based on output is not a new concept. In fact, there are decades of research and reports to support pay-for-performance (PFP) over a pay-for-time model.
According to a study published in the Journal of Applied Behavior Analysis:
"PFP systems produce higher rates of performance and more time on tasks than PFT systems. This finding replicates previous research that has evaluated PFP systems."
Under this type of productivity pay model, teams work together to get the job done as efficiently as possible, so they all optimize their pay. The most seasoned team member is inclined to help coach and assist the less seasoned team members because when one performs well, the entire team is compensated for that high performance. No one is left behind.
Increase pay to your staff by 35%, with no increased labor costs to you!
Cost Per Unit Model Aids Retention
The cost per unit structure leads to a better team environment, a strong culture, and, consequently, greater retention and less turnover. In fact, at Eclipse IA, we’ve seen a steady 20%+ gain in retention when our clients tie wages to performance. This is a huge benefit for our warehouse clients, but workers also benefit—we’ve seen wage increases of up to 35%, without increased labor costs for our clients.
A model like this is one major driver of the ability to keep adequate workers on board—a big boon during the impending holiday season when talent will be in top demand.
Get Started
You can survive the holidays this year if you manage your headcount, which maximizes productivity, the biggest challenge facing retailers and distributors this holiday season.
This holiday season, pay less—get more—with a warehouse worker model that doesn’t cost, it pays!
