Managing the Christmas peak in 2015
Supply Chain In online fulfilment, Christmas never really ends – the peak period remains a talking point all year long. The difference in 2014 was that peak meant ‘Black Friday’.
The unprecedented scale of Black Friday 2014 resulted in a huge compression of orders into a small window – with orders 30% above forecast during the weekend of the year when order volumes are already well above average. It caught most by surprise and heavily impacted fulfilment operations.
So what can be done in order to manage the peak better in 2015?
Firstly, keep in mind that there is no consensus on the duration of the Black Friday period, and it may vary – with some retailers running campaigns lasting just a few hours and others several weeks. This shift alone could help to spread the peak out over a longer period and alleviate the pressure on carriers. Communicating information about campaign durations to carriers and customers will be key to supporting accurate forecasting.
Providing delivery information is also important. From our own research we know that 85% really value in-transit updates, and it may be worth adjusting the delivery promise to avoid causing frustration – Black Friday is a long way out from Christmas so rapid turnarounds are less essential.
You may even consider a variable service promise – with the discount linked to the delivery service option selected. For example the customer may need to select seven-day delivery to qualify for a 20% discount, three to five-day for 10% etc.
A few additional points: heavy discounts trigger impulse purchases have the potential for high return rates, and keep in mind that the types of product your customers are purchasing might be larger in size, requiring two-man deliveries.
Black Friday will almost certainly evolve again in 2015, but with a precedent to work from this year and by working together we are well positioned to ensure it works effectively in the interests of both business and shoppers alike.