A lot of work has been done by the logistics industry to ensure that the Black Friday period is managed efficiently this year, and today IMRG is publishing three key considerations in support of achieving this.
1. Demand can vary
There are a number of variables that may impact the size and scale of Black Friday this year – such as the final November payday falling on Cyber Monday, the length of retailer campaigns, the depth of media focus and the British weather in the lead-up. However, probably the most determining will be the rate of discounts on offer and how widely available these discounts are – which will relate to whether promotions are department- or product-led.
2. Next day capacity is finite
During peak periods of high demand and ordering activity it can become very difficult to maintain an open next day delivery offer as volumes can become unmanageable. That said, simply switching next day off completely, even temporarily, may not be an option – for some retailers it is part of their strategic operation, or may be part of a long-standing customer offer that is fundamental to the brand’s identity.
One solution may be to avoid offering next day as standard, but instead to reserve it for premier customers or those with specific requirements and a genuine need for fast delivery. It should be noted that in many cases shoppers will likely be happy to opt for longer delivery lead-times in order to get the discounts they want.
3. Varying the delivery promise
Many retailers will probably look to extend their delivery promise this year during peak to provide contingency for their in-house fulfilment operations. The most important point here is to set realistic expectations for the customer and realise what has been promised. If this needs to be adjusted in real time in accordance with demand and performance it will not necessarily be a problem, as long as the customer is aware of what to expect at the time of ordering.
Andrew Starkey, head of e-logistics, IMRG: “In online retail terms Christmas is actually comprised of a series of peaks, with Black Friday likely to be the first and largest of them. Yet it is crucial that logistics operations run efficiently during this initial phase or it can be difficult to recover in time for subsequent peaks. Generally speaking performance has been good so far in 2015, with on-time first-time delivery success at record-high levels for most of the year, but there are many variables that may influence the size and scale of the Black Friday peak and disrupt forecasts. In order to counter the potential impact of these variations, having clear and open communication channels between carriers and retailers will be crucial this year.”
Black Friday 2014 – An Experian snapshot
Volume of emails sent on Black Friday was up 82% when compared with the average trading day in 2014
£810 million spent in a single day, making Black Friday the biggest retail day of the year
This was the first time that Boxing Day wasn’t the biggest shopping day of the year
Black Friday shoppers are typically between 36-65, on mid-range and affluent salaries (£50k +)
Research by Experian has also identified the two different consumer groups driving the growth in festive spending.
Time pressed, middle income families, typically from suburban and more rural locations, were found to have been the driving force behind pre-Christmas sales in 2014, which saw over £810 million spent on Black Friday (28th November) alone. In contrast, shoppers on Boxing Day and New Year’s Day are more likely to be younger, urban consumers.
These findings have significant implications for retailers. Last year, the majority of shoppers in the early-season Black Friday sales period were found to be living outside the major city centres in more rural locations. As a result, added emphasis needs to be placed on logistical planning and delivery services. However, bargain-hunters on Boxing Day and New Year’s Day are likely to require more support and service in-store, and in-person.
Key demographic differences for each group are outlined below:
The Black Friday shopper – a profile
· Typically families with children
· Aged between 36-55
· Mid-range salaries or affluent (£50k+)
· Suburban or residential locations, less likely to live in cities
· Facebook users
· Regular consumers of content on mobile devices
· The Boxing Day & New Year’s Day Sales shopper
· Less likely to have children
· Mixture of young and old consumers (26-35 and 56-65)
· Living in urban locations – easy access to shops
· Twitter users
· High consumers of online video content