Issue #1

Your VIP Pass to the Season’s Pulse in eCommerce Delivery

• 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.