1. Managing to the Unexpected in Peak Scott Casciato & Mike Honious 1

2. Background Scott Casciato Modcloth.com VP of Service s.casciato@modcloth.com 412.587.4938 Mike Honious OHL EVP of Operations mhonious@ohl.com 615.401.6482 2

3. Providing an exceptional customer experience during peak is critical…and it’s not entirely about pick rates! 3 1.Integrate operations with the promotional schedule 2.Prepare for demand “whiplash” 3.Include external supply chain partners 4.Educate and involve Customer Care 5.Take care of your team – they are the engine of a successful peak! Top 5 demand-side themes:

4. Partnering with the Marketing / Merch teams will help bring clarity to critical questions – that you both have! 4 Marketing / MerchandisingService What promotions are we planning? What products will be included? Are we thinking of out of the box improvements? When will we start our promotional period? What is our daily demand expectation? When will I need staff? How can I handle short (1 day) promotions / giveaway? When do I need to start / finish training people? What do my shifts look like? Communication & Planning

5. Get your facility and infrastructure ready for demand whiplash! Prepare to take advantage of your cross-training programs and target people for tasks during super-peak days Ensure that your site and internal systems are “load tested” for the demand that will hit them – test all integration points Have onsite support ready to fix issues and plan for manual / backup processes 5

6. Include external partners to extend your influence into the supply chain 6 Parcel Carriers: Ensure that trailers and sweeps are closely coordinated with demand expectations  Have more capacity on “super-peak” days  Ensure there is close communication between you and the carriers Ensure that your promotional schedule aligns with the potential of your outbound network!  Don’t plan a promotion that will result in orders sitting and waiting for sortation Software Partners  Ensure scalability of the systems and ability to add stations / people quickly

7. Make sure Customer Care can amaze your customers! 7 Educate them on every promotion and include them in all planning activities  Care knows the customer better than most and can often point out flaws in promotions to make them better Organize processes to enable agile editing and updating of your site and social channels  Be ready to communicate and be transparent on peak issues that will arise Expect the unexpected and organize thinking around how to turn those bad experiences into a loyalty opportunity  Empower agents to solve customer problems – without asking

8. Take care of your team – every day! 8 Plan for fun  Set aside budget for contests  Plan for meals during crunch times Engage them on the floor  Say thank you and set an example of diving in to get it done! Inform them of wins and challenges  They want to know how the company is doing – set time aside for updates – it’ll help them engage

9. Protect the customer experience – deliver the right product on time! 1. Know the Business… Know the Volumes 2. Understand the Right Staffing, and then more 3. Where are these people coming from? 4. Marketing has information, so use it for picking 5. Always think about more space, be flexible Top 5 Peak Seasonality Themes 9

10. Understand the Business Behaviors & Volume Peak Time! * Data tracked each day for two years 10

11. Volume + Engineering = Staffing Do not over estimate your efficiency to standards during peak volumes 11

12. Personnel Planning per numbers, per day, per department This is not time for vacation / PTO, but plan for Call Outs 12

13. Plan for the “7 Day Schedule” & Avoid Burnout  A/B/C staffing: Peak schedule will have full and part time schedules with set hours for ease of recruitment, 7 days  Staffing: Leverage at a minimum two temporary staffing agencies  Plan for 30% turnover  Management: Supervisors/Team Leads ratio 1 to 40  Make the easy jobs easy  Stress test: Set date minimum 2 weeks prior to peak to test peak plan 13

14. Create an environment where replenishments are evil and picking is fast  Work with Marketing to determine, which SKUs will be the hot SKUs  Fast Zone Picking for Orders containing HOT SKUs  Analyze the pick location sizes – minimize replenishment  Pallet and deep case flow for fastest moving SKUs  Case flow for fast and medium SKUs  Shelving for slowest moving SKUs  Active pick location capacity relative to peak day demand 14 Reduce the bottlenecks and adjust your pick zones to handle a majority of volume per day

15. Development of Additional Packing Stations and Utilization of Flex Space 15

16. Scott and Mike’s Top 10 List 1.Integrate operations with the promotional schedule 2.Prepare for demand “whiplash” 3.Include external supply chain partners 4.Educate and involve Customer Care 5.Take care of your team – they are the engine of a successful peak! 6.Know the Business … Know the Volume 7.Understand the Right Staffing, and then more 8.Know where your people are coming from 9.Marketing has information, so use it for picking 10.Always think about more space, be flexible 16

17. Questions? 17

18. Thank you! Scott Casciato Modcloth.com VP of Service s.casciato@modcloth.com 412.587.4938 Mike Honious OHL EVP of Operations mhonious@ohl.com 615.401.6482 18