Now that the dust has settled on Black Friday, the hard work really starts. 2016’s event, the third in the UK since Asda introduced UK consumers to the concept in 2014, has been marked by the long and steady build up. Many retailers, often those with pure-play online channels, ran a series of ‘events’ up to the day itself, in the hope of equalising out the pressures such a big one-day event could demand from their supply chain management. In 2014 it was ‘Black Friday’, in 2015 it was ‘Cyber Weekend’, as retailers continue to have first mover advantage and smoothing the peak, 2016 has seen the event almost become ‘Cyber Week’. As a UK leader in retail logistics solutions, and especially e-fulfilment, Clipper understands the demands of such peaks better than most, so we’ve taken a look back at this year’s event.
We should remember that ‘Black Friday’ was a challenge for retailers, long before the phrase was coined this side of the Atlantic. Christmas peak has always been a factor for the industry and support partners alike, and as such, systems and processes have always needed to be scalable.
The popularity of Black Friday has increased year on year, and 2016 is no exception. Clipper has seen an increase in orders on Black Friday of c. 320% from an ‘average’ Friday earlier in November. Perhaps surprisingly, this year’s activity has been on average just under 10% above our clients own forecast for Black Friday, in some cases 50% above forecast, showing that even planning for the extra activity there is need to build in a healthy contingency for surpassing your expectations. Despite this huge volume spike, and above forecast, Clipper despatched orders within 99.8% customer proposition.
Across our fulfilment sites the Friday peak saw Clipper operations fulfilling a little over 6 orders per second delivering our clients products to their customers. As our e-fulfilment client base is 55% fashion it is common for multiple item purchases in a single order, however, it was seen that the average items per order fell by 20% as more customers grabbed a bargain and went through checkout to guarantee their purchase, often returning later for more items within a further order. The rise of ‘free’ click and collect has enabled shoppers to make maximum use of this service, often at no cost to them. As an indication of this the recently announced Joint Venture between Clipper and John Lewis to provide a click and collect retail delivery sortation & delivery service to stores has demonstrated just under 300% increase in throughput during this event as a higher proportion of online sales have utilised Click and Collect as the customers preferred delivery method.
The modern consumer has become accustomed to having what they want, when they want it, and this is true for Black Friday too, so there is a big expectation that logistics providers and final mile couriers must be able to perform. One weak-link in the chain can lead to bottlenecks, and disappointed customers, venting their frustration on social media and beyond. In order to combat this, retailers and their partners must look at smarter solutions, for example click-and-collect options to take the uncertainty out of the supply-chain.
Consultancy firm Salmon forecast sales of £5 billion across the five-day week of Black Friday, £2.565billion of which was expected to be purchased made via mobiles. More than ever, people are avoiding in-store in favour of shopping online from the comfort of their own homes. As we’ve seen, the UK’s appetite for embracing this seasonal kick-off event for the Christmas peak is undiminished. The ease of online ordering has led to opportunities for retailers, but also challenges, not only in terms of outbound logistics operations, but also in the form of returns.
It should not be overlooked that Returns place a huge demand on retailers immediately after the Black Friday event. Due to the significant number of discounts in a limited time frame, many people make impulse purchases, or buy with the attitude that unwanted items can be easily returned, leading to a considerable surge in those that must be managed. Last year, we dealt with in the region of 500% uplift in return volumes handled after the ‘cyber weekend’ as compared to a typical weekend, it is expected that return volumes will follow a similar pattern in the following weeks creating a challenge to process, refund and put back into stock items in the shortest time possible. Consumers increasingly make retailer choices based on a slick returns operation, an industry leading example of which is Clipper’s Boomerang returns management solution. Not only do consumers want to be able to return items at their convenience, they also want to have money refunded to their accounts quickly, and be kept up to date with that process.
Some have predicted that over 5million parcels will be returned after Black Friday alone, this year. As such, a reliable, integrated and optimised returns solution is now a ‘need-to-have’ for any retailer looking to ensure a successful peak. It is crucial to have an efficient and reliable supply-chain solution to cope with these volumes and to ensure that retailer’s revenue is not tied up in the returns process.
Whereas in previous years, Black Friday has caught out some retailers, it seems that more than ever, the UK retail sector is geared up to cope. By turning the one-day ‘event’ into a week-long promotions period, retailers can spread risk and potentially protect margin. Customers should always remain at the heart of the equation, both for retailers and those in the logistics industry who work so hard behind the scenes. To give you an idea of the work that goes into making sure everything runs smoothly, planning with our retail customers for peak 2017 will begin again, in earnest, in January.
