Peak Bulletin 2022
Gauging the Pulse of eCommerce Delivery
The Peak Bulletin puts together unique insights on carrier updates, industry happenings and parcel volumes based on GFS proprietary data.
This year, we’ve taken it up a notch to share a wider perspective on what’s happening with guest commentary from industry experts.
GFS data perspective on parcel volumes and delivery performance across the industry
A quick look at Week 49 as shoppers transition from offer-induced buying, towards festive-frenzy shopping.
VOLUMES: PUMPED UP OR TONED DOWN?
Data on parcel volumes — are numbers up to or above expectations and industry forecasts, or have they caved under the excruciating uncertainties of 2022?
Volume in Week 49 was in line with our expected forecast, and flat versus Week 48. This week-on-week trend is similar to what we have seen in previous years.
Whilst there is still a spike in volumes on a Monday, the volume across the remainder of the week does not fall off as dramatically — so overall we are seeing flatter delivery volumes across the week.
We are now seeing sales volumes transitioning from Black Friday/Cyber Monday offers into gifting volume, with hampers coming into the delivery mix and helping to boost overall volumes.
The “mood” of digital shoppers this week and how it’s driving performance metrics across product categories.
Based on our data analysis, it seems that buyer shopping habits have evolved this year, with less purchase concentration over the weekend than in previous years and a more even mix prevalent during the week.
The pressure is ON for parcel deliveries — how are carriers faring in the race to the customer’s doorstep?
Carriers have reported a strong weekend delivery performance. However, some areas have seen impact from snow, and the risk on performance is expected to increase across the week as further snowfall is expected at the start of the week.
Retailers are switching volume from Royal Mail to mitigate the risk of strike action on deliveries. With the spikes in volume and strike action, carriers are still managing a delay in deliveries in some locations. The good news is, Hub performance in processing parcels continues to be strong.
Feedback from Carriers is that courier recruitment in the impacted postcode areas still remains a challenge. Some carriers have now increased incentive payments for people joining with loyalty bonuses for working through until Christmas.
Q&A With Our Guest Expert – We spoke with Senior Supply Chain Leader Jim Higginson, (former Senior Director of Logistics and Customer Fulfilment, Huda Beauty) to get some hindsight on Black Friday
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.
Jim Higginson, Senior Supply Chain Leader
SIT TIGHT AND WATCH
We ask the questions we’d like answered this week
Further challenges are expected this week for carriers with higher diverted volumes hitting carrier networks this week from Royal Mail strikes on 9th and 11th December. This is expected to heighten further in the middle of the week with further planned strikes from Royal Mail on 14th and 15th December.