With Black Friday rapidly approaching, and Christmas less than a month after that, retailers have to ensure they are fully prepared for these major sales peaks if they are to keep customers happy. That means comprehensive reviews and planning to ensure that everything from store operations to stock management, staffing and logistics are fully prepared for the imminent influx of demand.
This used to be a fairly straightforward process; the main challenge was to make sure that the supply chain and logistics operations were set up to cope with Christmas cut-off delivery times. However, with the arrival of Black Friday, a US borrowed tradition that has now firmly taken grip in the UK’s psyche, everything has changed.
Christmas demand is now a much more volatile affair that risks throwing well-practiced supply chains and planning into chaos. Sales are expected to break the £1 billion mark this year on Black Friday, according to digital consultancy Salmon. This is compared to £810 million last year, which itself was a doubling of the previous year, as shoppers take advantage of huge discounts.
Along with this leap in spending, four times as many shoppers are expected to buy online compared to last year, putting pressure on website resilience as well as retailers’ logistical efforts. Black Friday is now famously followed by Cyber Monday – a similar day of sales and promotions, but for deals that are only available online. In 2014, consumers spent £650 on Cyber Monday alone.
So what does this mean for retailers? One survey last year suggested that two thirds of UK shoppers were unimpressed by retailers’ preparations for the high demand that some stores experienced. Websites of retailers, including some large household names, struggled under the sheer volume of visitors, whilst in-store shoppers broke into fights to get their hands on bargains in some stores. Clearly, retailers will not want to repeat the same mistakes this year.
Some are getting round the intense demand by scheduling their offers more strategically. Amazon, for example, plans to launch a week of deals starting on Monday 23 November. With this type of forward planning, retailers can spread the load on their logistics networks by actively encouraging orders at quieter times.
In any case, retailers will need to work very closely with their delivery partners during peak times, since initiatives like Black Friday promotions effectively disrupt the traditional pattern of demand. Logistics companies will also need to factor in these new peaks – and consider how they could affect Christmas demand into December – to ensure they have sufficient capacity to fulfil both the new peaks and the old.
As retailers continually push delivery cut-off times in the run-up to Christmas, it is important to make sure they’re not promising the unachievable – taking into account both the capacity of their logistics providers but also the potential for unforeseen delivery disruptions, such as adverse weather.
Ongoing communication between the retailer and their logistics partners is vital for ensuring that both sides understand the delivery process and exactly what they can promise to their customers to ensure their brand reputation is not damaged. Unless this goal can be achieved, retailers literally run the risk of failing to deliver – which means little seasonal goodwill from customers, who will almost certainly choose a different place to shop next Christmas.
