• The countdown to Christmas is nearly complete; Peak 2023 has seen robust parcel volumes in a flatter and more sustained fashion.

• Volume in Week 50 saw further growth versus Week 49 and gave a clear indication that consumers are still looking for last-minute deals with the potential that parcel volumes will have one final flurry of last-minute orders before Christmas.

• Volume in the Fashion sector increased again in the week with several retailers starting their seasonal sales.
• Gifting had seen a slower-than-expected start to Peak, however, volume has grown strongly as the Peak period has progressed.

• The majority of carriers will be delivering on Saturday, 23rd December and Sunday, 24th December to fully clear out their networks and deliver as many parcels as possible pre-Christmas.

• As has been the trend in previous years, we expect a transition from 2-day services to Next Day throughout this week as retailers want to remove any risk of a potential delay impacting delivery.

• Overall the very strong delivery performance we have seen throughout Peak 2023 has continued throughout the last week.
  

Peak is still ongoing but you should already be thinking about next year! This is particularly true in the world of data and personalisation. Upon reflection did you have the data you needed to truly personalise the offers and experiences you presented to your customer during Peak this year?

If you feel that you could go further next year then think about:

1. What new first or zero-party data you have collected this year that can be used over the next 12 months? How could you use it to enhance your customer experience?
2. What were you not able to do this year that would like to next Peak? Did you need more data to inform recommendations? Do you know about your customers’ preferred delivery or payment options? If not, start collecting this information so you are ready next time.
3. Having thought about what the use cases are and the data you need, think about if you have the right technology in place to deliver that enhanced experience.

• On reflection, the shape and phasing of Peak this year has not just helped the pick & pack process for retailers, it has also aided the sort and delivery capabilities of carriers.
• Overall, the very strong delivery performance we have seen throughout Peak 2023 has continued throughout the last week – it is expected that 2023 will set a new benchmark in performance for Peak in future years.

• From a carrier perspective, Peak this year continues to be Calm, Controlled and Coordinated. It’s important to highlight that this has been achieved through considerable investment and months of planning to provide such a strong delivery experience.
• Service performance has recovered strongly following disruption last week from snow in the North East and Cumbria, and weather delays impacting ferry crossings to Northern Ireland, Isle of Man and the Channel Islands.
• Carriers are advising that they are now successfully through their Peak volume days and weeks, however, there is no complacency and the focus is on maintaining performance for the remaining weeks of Peak.

Amid the battle for customer spend during Peak you’ve gained a cohort of new customers. Success! Potentially the acquisition costs are higher than usual what with extra media spend, discounts and a higher return rate than normal.

• Make the most of these new customers to ensure a healthy-looking Customer Lifetime Value by making the most of the first few days and weeks of the new relationship.
• Post-purchase communications need to ensure your customers get the most from their products.
• Your loyalty or rewards programme should be introduced, and its benefits highlighted.
• Be mindful of the next promotional message you send. It’s not about what you want to sell. It’s about what the customer wants to buy.

• Last week (Week 48) presented a tale of two halves. Cyber Monday and the subsequent two days witnessed robust volumes, but towards the week’s end, volumes did recede slightly in line with expectations.
• The spotlight now shifts to the next phase of Peak. Despite surpassing the record volume days of Black Friday and Cyber Monday, there’s a distinct anticipation that heightened volumes will persist for the remaining three weeks. Early December pay packets are projected to trigger a late surge in orders and parcel volumes.

• Fashion retailers continue to show strength with robust volumes, reporting record volumes over the Cyber weekend.
• While there’s an overall uplift in volumes across all sectors in the last week, the Gifting sector is yet to fully kick in with Peak volume. Evidence suggests a gradual increase towards the end of Week 48 and throughout the weekend.

• Carriers note that their total volumes are slightly lower compared to forecasts for Week 48, contributing to enhanced service performance and a positive delivery experience for consumers.
• Carriers have exhibited effective control and management of parcel volumes with:
  • Incident-free sortation processes at Hubs and Depots.
  • The recruitment of additional delivery drivers, resulting in a robust final-mile delivery experience.
• Notably, one carrier partner delivered over 1.4 million parcels over the weekend, prioritising early delivery for a stronger position in Week 49.
• The service performance has been challenged over the weekend through heavy snowfall in parts of the North and Scotland. This has had an understandable impact on delivery performance as some roads were impassable.
• Overall, the first 2 weeks mark the strongest start to Peak in many years.

This week we focus on Peak delivery expectations

• Shoppers’ delivery expectations are higher than normal over Peak season – they demand speedy and punctual parcel journeys with regular updates, delivered to their location of choice, with the reassurance of hassle-free return options.
• Prompt and reliable delivery is a must. Over half (56%) of shoppers expect to receive their online orders within two days during Peak (Fig. 3), with a similar proportion (55%) willing to pay up to £7 extra for super-fast delivery, ensuring orders are received in time for the ‘big day’.
• However, less than a third (31%) of online merchants surveyed currently offer delivery of two days or less, as standard, at this time of year.
• Unsurprisingly, the biggest concern for UK consumers when it comes to delivery at Peak season is late deliveries, with 46% of consumers highlighting this.

In the bustling world of eCommerce, the Christmas season, often termed “Peak,” presents unique opportunities and challenges for brands. Here’s how to maximise customer experience:

• Personalised Engagement: Utilise customer data to personalise the shopping experience. Tailored product recommendations based on browsing history or previous purchases can significantly enhance the customer journey.
• Streamlined Navigation: Ensure your website or app is easy to navigate during the high traffic of Peak. Simplified search functions and clear categorisation can prevent customer frustration and basket abandonment.
• Reliable Customer Support: Offer robust customer support, including live chat options and comprehensive FAQs. Quick and efficient problem resolution can foster customer loyalty and positive word-of-mouth.

• Black Friday volumes held up well, proving highly successful for some retailers and generally favourable for others.
• Notably, there was a substantial week-on-week surge in volumes, with week 47 witnessing a remarkable 30% increase compared to week 46 — exceeding the uplift rates seen in 2021 and 2022.

• Media scepticism regarding the quality of Black Friday retail offers may have slightly dampened sales, but overwhelming evidence indicates that Black Friday maintains its grip and strong appeal for many consumers.
• The fashion sector experienced sustained growth in the last one week. Electronics and Home Appliance volumes have also stood their ground. The Gifting sector, which traditionally hits its Peak a bit later, is anticipated to witness a significant increase in the coming two weeks.

Carrier performance across the week has been exceptional, demonstrating high compliance in collections and strong final-mile delivery performance. There’s every indication that carriers will continue their success streak during Peak operations. However, the looming threat of snow towards the end of the week will cause some concern about potential delivery disruptions, especially in remote areas.

This week we focus on Peak prospects and Shopper Behaviours

•   Almost two-thirds (64%) of UK households plan to do most of their Christmas shopping online this year, with marketplaces set to be the preferred online channel of choice (Fig. 1).
•   UK consumers are set to spend £17.9 billion on online marketplaces this Black Friday and Christmas, according to Retail Economics.
•   Almost one in every two online orders over Peak season will be made via a marketplace, including general marketplace giants such as Amazon and eBay, and more specialty platforms such as Depop and Etsy.

In a competitive retail environment with high customer expectations and fragile loyalty, marketplaces deliver the convenience (flexible delivery options, wider assortment, and product availability) and compelling value that consumers demand.

• Several retailers have reported high stock levels, anticipating a robust Peak season kick-started by a successful Black Friday weekend.
• Volumes over the last week (week 46) indicate a noteworthy surge as compared to previous weeks, with an increase of 15-20% in average volumes vis-a-vis week 45. Week 46 also started to see high points on individual days of the year being achieved.
• Peak forecasts draw support from ONS data revealing a slight dip in overall retail sales volume in October. However, this is countered by the positive growth in non-store retail sales volume, which rose by 0.8%.

• Thanksgiving and hence Black Friday falls at a much earlier time in November this year heralding a longer Peak trading period.
• The shape of Peak is always intriguing and this year promises to be no different. While global forecasts hint at a potential dip in total eCommerce volumes during Peak, individual retailer predictions showcase optimism for moderate sales growth.
• Many retailers have jumped the gun, initiating early Black Friday promotions to not only drive sales but also engage consumers in good time to secure Peak sales.
• Week 46 data highlights robust growth in the fashion sector, witnessing increased volumes in clothing and footwear. In the same week, the home appliance and electronics category has also experienced a surge in sales activity. This growth is expected to persist with retailers offering an enticing 25% to 50% off in the run up to Black Friday.

• Forward-thinking retailers have embraced multiple delivery solutions in the past 12 months to offer more options at Checkout. This includes extending services for direct deliveries to Parcel Shops. This strategy mitigates risks tied to individual carrier capacity, supports consolidated delivery to a single location, and offers customers choice to manage parcel collection at their convenience.
• Carriers are entering Peak season on the back of a robust delivery performance, having pro-actively addressed challenges from previous years. Early completion of massive recruitment efforts for drivers, operational teams, and customer service agents has bolstered service levels in the past two weeks.
• Meticulous carrier planning acknowledges past capacity issues from 2022, with strong operations policies now in place to manage collections and regulate capacity. This safeguards the integrity of their final mile delivery service.
• Carriers have made substantial infrastructure investments in the last 24 months, enhancing network sortation capacity to handle Peak volumes efficiently. The emphasis now is on controlled parcel flow to delivery networks, ensuring a seamless final mile delivery experience for consumers.

This week we focus on Peak prospects and Shopper Behaviours

• Due to ongoing cost of living pressures and higher interest rates, the typical UK household will have £109 less to spend in the run up to Christmas compared to last year (Q4 2023 vs Q4 2022). As a result, 79% of UK consumers plan to cut back on discretionary spending related to Black Friday and Christmas.
• Retailers appear to be more optimistic about prospects for Peak demand, with almost two-thirds of online merchants surveyed stating sales volumes will broadly align with last year and 24% expecting volumes to rise on last year.
• Savvy consumers are using all means necessary to manage their budgets by leveraging promotional events such as Black Friday, searching for bargains on online marketplaces, and starting their festive shopping earlier to spread the cost (see Fig. 1).
• The impetus to shop early and engage in promotional events is particularly pronounced among younger shoppers. 44% of digital natives (aged under 45) intend to make a festive purchase during Black Friday/Cyber Monday.
• ‘Early bird’ shopping is becoming the norm. 40% of UK consumers surveyed starting their Christmas shopping pre-October, while one in four retailers say they’ve launched their festive promotions earlier than normal this year – effectively elongating Peak season.