What’s your take on the stronger-than-expected trading volumes we’re seeing this Peak (besides the need to bag offers to save wallet pinch from the cost of living crisis)?
First of all, brands have heavily invested more in social media platforms to promote themselves and their products on an ever-increasing number of platforms. The brands now have very sophisticated, integrated marketing plans to engage consumers. They did a great job in driving and converting demand. Secondly, the number of consumers who buy online regularly goes up every year and they were attracted to the deals on offer. And with the options available for delivery increasing, online purchasing becomes an easier option. And also, brands are smarter now about knowing the mechanics that drive their consumers to buy with heightened consumer insight.
With recent strike action impacting retailers during this key business period, how should eCommerce businesses reliant on a single parcel service strategise to mitigate risk?
I think it’s always a risk when you enter Q4 peak trading with only one delivery partner on offer. My preference has always been to have at least a couple of options on the table and work with them closely to ensure that the forecasted parcel volume is as accurate as possible. It’s not easy for some companies from an IT integration issue (labels and tracking), but I would encourage businesses to have a plan B up their sleeve in these uncertain times.
Of course, having used GFS myself, I know they can give you multiple vendors with one IT integration and all pricing available. All it takes to change service in the event of strikes or service disruption is to change a code in the integration and you are off. It takes away having to urgently negotiate and integrate with carriers in the event of a problem during Peak trading.
How can the industry address the rising cost of delivery?
The main one is pretty obvious. Make sure your warehouse is as near to your consumers as it can be! UK for UK consumers and EU for EU consumers.
There are two other ways I would suggest in trying to reduce delivery costs in a world where everything is increasing in price. Firstly, know the weight/volumetric breaks in your shipping tariff. Make sure that the box/envelope sizes you are using fit the parcel tariff breaks you are using. If you are not then you are paying to ship air!
Look at alternatives to boxes for the smaller shipments. Using padded environment-friendly envelopes may allow you to reduce costs on shipping. Work internally with your commercial colleagues to increase the UPT so that you in effect fill the packaging you are using.