If you thought shopper power was already a strong trend it’s one that will be even stronger during this year’s peak period, says Bruce Fair, chief revenue officer at MetaPack.
Shoppers are the first to admit that during peak online sales periods free delivery encourages them to buy more. In fact, in a recent survey we carried out amongst consumers, three-quarters (75%) confirmed that this was the case. While low cost, fast and multiple delivery options and prices resonated with up to a quarter of consumers, at peak, it is not just the hearts of shoppers that retailers are fighting for, it is their carefully guarded wallets.
Consumers are shrewd, looking for the best deals they can get, and acting swiftly to bag a bargain from those retailers who have extended their promotional period, starting much earlier in October. We can see the evidence by looking at the delivery data from our platform, where not only has there been a distinct rise in volumes, of around 20%, but orders have been breaking records every week for almost two months.
This is not peak as we know it. This is a carefully planned, strategically executed mission by retailers and carriers to meet consumer expectations, and also to gently steer them towards a more manageable, extended run up to Christmas.
That’s not to say that we won’t see a big spike in orders on Black Friday and the subsequent weekend, but with promotions already underway, the machinery that supports a successful Peak is well oiled and running smoothly.
The perils of an unsatisfactory delivery
The fact is that retailers and carriers cannot afford to get it wrong. Online shoppers are unforgiving, and expect the same level of service, options and delivery at peak that they are accustomed to getting the rest of the year. Our survey showed that 39% of consumers would never shop with an online retailer again following a negative delivery, so it’s a question of getting the entire process, including last mile capabilities right, or suffer the consequences.
The last two years have been a model of good planning, organisation and partnership. Promises to customers have been kept, and retailers and their carrier partners have honed their logistics and delivery processes to ensure SLAs are met.
What may make an impact, however, in 2017 is the number of options that customers will expect to see throughout the peak period, and which may be challenging to provide. This year has seen a growth in one-hour deliveries in metropolitan areas, and ‘try-before-you-buy’ options are now becoming very popular. Are these sustainable during the busiest period of the year? What about the much bigger number of PUDOs that have been established over the past twelve months in handy locations such as convenience stores and petrol station forecourts – how will they cope with a sudden increase in the number of parcels being delivered, are they ready? Customers will certainly expect them to be.
The approach that carriers take is to plan ahead and forecast the likely increase in deliveries so they already have access to staff, vehicles and sortation capacity. The carriers on our platform continue to offer the same level of service to retailers and ensure they are prepared to step up to meet the additional challenge during peak. It’s an approach that has been developed over the past two years, and it has worked. Of course, it’s possible that their capacity forecasts are wide of the mark, but this is unlikely and we don’t anticipate any change in the carrier’s ability to support popular options including ‘track and trace’, ‘in-flight changes’, ‘deliver to neighbour’ and ‘leave safe’ over the next few weeks.
One trend that we are watching carefully is the number of orders for delivery overseas. Customers outside the UK are clearly very sensitive to the fluctuations in price that they see on UK online retail websites, and if they calculate additional value in purchasing at peak, they will act on it. But, ecommerce is a global community and the expectations of overseas buyers for delivery accuracy will be just as high as those in the UK, with the additional pressure of ensuring goods arrive via overseas shipping routes in time for the Christmas holidays.
Shaping future preferences
In many ways retailers have a golden opportunity to shape customer preferences for the year ahead. The urgency to receive goods purchased during peak means that a broader range of delivery options will be sampled. A customer who would normally be happy to wait 2-3 days for a delivery, is much more likely to try same day delivery at this time of year, and if the experience is satisfactory, may use it more frequently in the future.
The trick is to find a workable balance between managing capacity, working within agreed parameters, and taking advantage of increased customer spending. All retailers will have one eye on their competitors and must make decisions about whether they can sustain the number and variety of delivery options they provide against ensuring they can fulfil those promises during the hectic peak period.
Getting goods into customers’ hands as quickly and conveniently as possible is in the DNA of online retailers, who already understand that they have to get delivery right or risk losing customers. In the weeks running up to and beyond Black Friday this is more vital than ever, but as in the previous two years, this period brings immense opportunities, not just to sell more goods, but to lay the foundations for valuable customer relationships for the future.
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