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Best Practice: Dealing with the ‘peak tsunami’

The phenomenon that is Black Friday last year took us all by surprise. An unprecedented level of attention from the media fanned the flames of anticipation from consumers looking for the best possible bargains. The result, a massive spike in the volume of orders made during a 24 hour period – 30% higher than forecast — and a huge impact on delivery services, carriers, in fact the entire retail supply chain that took days to recover from.

Clearly consumer buying patterns have changed. Black Friday is not new. It originated in the USA to capture shopper interest immediately after Thanksgiving and in the UK it has grown year on year as retailers encourage early Christmas shopping. Where once they might have offered more general incentives they are now responding to shopper expectations and lining up huge savings for Black Friday. In turn this is prompting shoppers to hold back from placing orders while they wait for this much anticipated day in the eCommerce calendar.

One thing’s for sure, last year’s Black Friday was not a fluke, and Friday November 27th 2015 promises to deliver even greater levels of shopping fervour, more media excitement, and a challenge for retailers and carriers which requires careful planning, excellent communication and a commitment to best practice, not just in the run up to Black Friday, but throughout all the ‘mini peaks’ that lead to Christmas.

Putting peak into context

Because we track delivery volumes for the MetaPack IMRG Delivery Index we have unique insight into the ebb and flow of activity throughout the year. We are currently tracking at 13% up on 2014, which is in line with forecasts, but as we know from experience, there can be unexpected peaks and troughs which adversely affect the figures.

Black Friday notwithstanding, we fully expect there to be a series of additional small peaks during the Christmas period and retailers are anticipating that both the weeks commencing 23rd and 30th November will be particularly busy for eCommerce.

Getting prepared

We can learn so much from what happened in 2014 in order to prepare now, but perhaps the most salutary lesson is that all the stakeholders in the process must work together, not over-promise to the customer and constantly monitor levels of orders and adjust logistical arrangements accordingly.

Most retailers are already in discussion with carriers and delivery services to put frameworks in place for the peak period; those that are not need to catch up quickly. Agreements can be reached about the level of parcel volumes that carriers can handle efficiently within the timeframes promised to customers. If a retailer decides to line up second and third tier carriers, it would be a good idea to ensure some orders are handled by them now, so both parties can get used to working together.

Retailers using a delivery management platform will have the flexibility to select different carrier options during the peak period. Switching helps to keep volume levels within the parameters agreed with carriers beforehand and also reassures mid-tier retailers that they won’t be ignored in favour of a larger player.

Because arrangements with carriers are made in advance, the delivery management platform will automatically assign a different carrier if the agreed number of trailers, or the agreed number of parcels has been reached. This level of automation ensures that the process moves forward smoothly, removing barriers to delivery and ensuring that parcels arrive on time.

Feedback from carriers and retailers alike after last year’s challenges indicated that a lack of clear communication didn’t help when the ‘peak tsunami’ hit. The strength of the supply chain relationship is absolutely crucial in ironing out any misunderstandings and at the heart of this is open discussion and clarity around what is expected and what can actually be achieved. An extra 20% volume cannot be negotiated once demand starts to grow; that’s the point at which a retailer must switch to another carrier.

Communication must also be clear with the consumer. Over the past year delivery service options have become much broader and customers are accustomed to third-party pick up and drop off, same day delivery, Saturday and Sunday delivery, etc. These help retailers to differentiate themselves and may be an important part of their peak campaign, but to fulfil them, they will need to have a multi-carrier strategy in place. If orders rise to such an extent during peak that premium delivery options are no longer easily fulfilled, retailers must be flexible and inform customers that delivery will be within 48 hours, 3 days, even 5 days and if it suits them better they can click and collect from stores.

If the consumer is clear that these are their options, they will select accordingly. Much of the shopping being done during peak is for Christmas, which actually removes rather than increases the urgency,  and it also makes it less necessary for retailers to compete by rigidly sticking to a next-day delivery promise.  What the customer will value most is that a retailer has delivered their parcel when they said they would.

Another way to soften the impact of peak is to run strong promotional campaigns over a longer period of time – perhaps in the week up to Black Friday, or across the entire weekend. This will certainly spread the load for retailers and carriers. Messaging to this effect needs to be conveyed to the media to stop them whipping up expectations but it could be achieved if retailers work together and in harmony.

Best practice

This year many top retail brands and carriers have already engaged in industry-wide debate to discuss the issues around peak, and they are committed to ensuring best practice prevails. Processes have been assessed and amended, integration with delivery management platforms perfected and service agreements made in advance. At this stage we are collectively ready to deal with the peak tsunami, and even if orders increase four-fold, as is predicted in some quarters, we are better positioned to maximise the massive opportunity that it affords us all.