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
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?
Week 50 volume remained consistent with the parcel count in weeks 48 and 49, and reflected a similar trading pattern to previous years.
Royal Mail strikes on Wednesday, 14th December and Thursday, 15th December again resulted in increased parcel volume from SME’s and impact on carrier service performance. Carriers are actively restricting any new parcel volume to protect existing network capacity.
Several carriers have now brought forward the date of their last collection dates to support a Christmas delivery – the cut-offs that are now being advised by some carriers are aligned to Royal Mail’s own cut-off times.
Snow and Ice was also reported as having a major impact on delivery performance in some regions last week.
The “mood” of digital shoppers this week and how it’s driving performance metrics across product categories.
Strong growth continues across the week in the fashion sector; and while gifting had seen a slower-than-expected start to peak, volumes have kicked in over the last one week up to the forecast trading levels.
It is expected that there will also be strong promotional activity with a final push on Christmas sales at the start of the week and retailers then quickly switching offers to start end-of-season sales early.
The pressure is ON for parcel deliveries — how are carriers faring in the race to the customer’s doorstep?
Overall, very strong deliveries over the last weekend have helped to further reduce volumes across the carrier networks.
There has been increase in Next Day shipping to the service delivery mix, which is consistent with previous years in that both consumers and retailers favour a next day delivery service to protect against the risk of any network delay.
The final delivery week before Christmas is once again expected to be challenging as carriers have to mitigate the risk of increased volumes due to Royal Mail.
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) addresses the rising cost of returns the industry currently faces
Returns processes need to be operationally viable without disrupting current customer expectations. Make sure your returns processes are clearly articulated on your website. Work with your Customer Service teams to make the returns process as slick as possible. For instance, ensuring that prepaid returns labels or collections are centrally arranged and managed by the CS team, and the return logged so there is some form of approval process.. Also make sure you try to use the parcel carriers you are also using for your outbound to keep the volume and therefore costs down.
I would also work on the returns processing within the warehouse so that you can ensure that any credit that is given can be checked on the return arriving back and fed back to the Customer service team if there are issues. A good starting point to minimise non-faulty returns is making sure that product pictures and descriptions are accurate on the website.
Whether you as a brand absorb the cost of non-faulty returns or pass it on back to the consumers will depend upon your industry. My personal view is that free returns for consumers can be a very valuable selling tool as long as you have some control on the return coming back. A sensible level of returns can then be built into your cost of sales. Returns can be fiddly and therefore labour intensive to solve so finding the right experienced shipping partner for both outbound and returns is crucial.
Jim Higginson, Senior Supply Chain Leader
According to IMRG, November came in above expectation with sales volumes, with flat growth but still ahead of growth rates for 2022, where every month has been negative. It is slightly surprising that demand increased when it has been so low for the whole year.
Volume may have been pulled forward, with people doing their Christmas shopping earlier this year to take advantage of discounts to a greater extent than normal.
The first-ever football World Cup in the winter was expected to cannibalise Black Friday and Christmas sales, but digital shoppers kept on with their shopping — whether it was from an early out for England and Wales, or just in a bid to bag the best deals remains a question mark.
Carriers have managed to reduce delays amidst weather challenges and Royal Mail strike impact, but the uphill task continues with more volume from upcoming Royal Mail strikes on 23rd and 24th December.
What also packs up on the pile of retailers’ and carriers’ rising challenges is managing reverse logistics in the weeks ahead.
Watch this space for more information on lessons learned over Peak.