Written by Matthew Robertson – Co-CEO, NetDespatch
These days, planning for peak retail season starts the moment the last peak ends. In a bid for continuous improvement retailers and carriers forensically review what went well, which new tactics and technologies worked, which didn’t and where refinements can be made. This is followed by adjustments and investments, bedding in innovations and getting as prepared as possible for the next peak period. It’s a frenetic cycle and you wouldn’t be wrong in thinking that the gaps between peak seasons are getting shorter every year.
I’ve noticed this year just how many “early Black Friday” sales began at the start of November, despite the actual event not occurring until the last weekend of the month. Interestingly, this year China’s ‘Singles Day’ – on 11th November - really started to have an international impact. The festival, which started in 1993 as a student-led celebration of being single, has grown into a month-long shopping spree peaking on the day itself. It’s the world’s largest offline and online shopping day, with Alibaba this year reporting sales of £23.81 billion across 230 different countries – dwarfing the £11.2 billion sales of 2017’s Black Friday. If this trend continues to go global, we’ll see more retailers bidding to capitalise on the ‘treat yourself’ ethos behind Singles Day and extending the peak period out even further.
So as the hooks that peak season hangs on evolve, what does this mean for delivery? An obvious benefit of the season stretching earlier into November is a reduction in the Black Friday bottleneck that has previously put strain on the delivery network. With a month of deals, rather than one big weekend hit, retailers should have a better chance of getting their parcels to customers on time.
However, on the flipside of this are customers’ ever-increasing expectations that their orders will be delivered the next day. We saw this phenomenon in the IMRG Valuing Home Delivery Review 2018 – more than half of all ecommerce orders are now scheduled for next day delivery (and that figure reached a peak of 55% in September 2018, according to IMRG).
The report also highlighted the crippling costs of failed deliveries – ranging from £9.80 for a re-arranged delivery up to £147.14 for replacing lost parcels. That’s not counting the reputational damage to retailers and carriers when parcels fail to arrive on time. These costs are concerning for mega-retailers, but catastrophic for smaller companies, where the benefit of Black Friday sales boosts can potentially be wiped out by failure to deliver to the right place, first time. Clearly, it’s in everyone’s interest that the delivery network is prepared for the strain of peak season.
In order to deliver Black Friday-level volumes to tight time scales, retailers and logistics partners need to have honed order-taking, picking, despatching and tracking processes to the highest levels so parcels fly out of the door. A key part of that is eliminating errors. This is critical during peak periods where seasonally employed staff may be less familiar with operating procedures. At NetDespatch we help customers eliminate the risk of human error by integrating their systems directly with their chosen carrier enabling them to automate the generation of shipping labels, bar codes and pre-advice directly from order data. This means that the process is far more reliable and cost-effective and the risk of delivery failure is reduced.
Parcel visibility reduces delivery anxiety
Having visibility of exactly where their parcel is in the shipping process can actually be more important to customers than receiving it as fast as possible. On this front, advances in tracking technology mean that it is easy for carriers to offer customers real-time information on their parcel’s progress. This may make customers more willing to opt for longer – but more reliable - delivery times. Previously customers submitted their order and heard little more until the courier pressed their doorbell, which created a preference for reducing the window of uncertainty by making it as short as possible – by choosing next day delivery. Accurate tracking technology eliminates that uncertainty, giving customers a sense of control and creating a better experience.
We should also bear in mind that the majority of earlier peak season purchases fall into the nice-to-have, rather than emergency, category, meaning that next day urgency is typically misplaced. The extension of the peak offer period means that, providing the parcel is delivered before Christmas, it probably doesn’t matter if it takes 48 hours to arrive from the point of order, rather than 24. Retailers shouldn’t be afraid to manage customer expectations and prioritise first-time delivery success over the promise of speed that doesn’t always succeed. Ultimately, this will save everyone money and reduce inconvenience for both customer and carrier – both premium commodities in today’s world.
Of course, once the extended ‘Black November’ is out of the way there’ll always be a mad scramble as we approach Christmas Eve, and that’s when next day delivery for those all-important last-minute presents really has to mean next day.
Within the industry there seems to be a definite sense that many of the technology advances that have improved order management, accuracy and tracking have matured to the point that they’ll make a positive difference in the customer experience of peak season this year. Combined with a potential reduction in the Black Friday bottleneck due to early offers, we may see stronger delivery performance this year.
It will be interesting to see whether this confidence is borne out as the season progresses. What’s for certain is that, as always, we’ll have much to learn from how peak season plays out and plenty to think about as we plan for peak 2019!