Analysis

Opinion: Surviving peak – what GFS learned from delivery in 2018

GFS

Dan Ennor, commercial director at Global Freight Solutions (GFS), shares learnings from the company’s  peak period, during which it saw parcel volumes rise 20% year-on-year.

The peak period (Nov-Dec) is considered a lucrative time of year for nearly all retailers, emphasised by the fact that UK consumers spent a sizeable £6 billion over Christmas and Boxing Day alone in 2018. In fact, Global Freight Solutions saw a 20 percent increase in peak parcel volume compared to the same time last year. That said, every retailer is different. They all put different levels of emphasis on the importance of peak, depending on their business model.

So, with that in mind, what have we learned from peak delivery in 2018 and what steps can retailers take going forward, to ensure they are maximising their revenue?

Some retailers live and die by peak

Naturally, for retailers, there’s a lot of focus on the peak period; with such a large number of consumers engaging with retail during this window, it would be irresponsible of brands not to try and make the most of it.

However, one of the key learnings we can take from peak delivery in 2018 is that for some businesses, peak isn’t just a sales boost but the main source of their annual revenue.

One example of such a retailer is ClearWater Hampers, a brand whose product range largely consists of gift baskets that are particularly popular at Christmas. To put their reliance on peak into perspective, in 2018 ClearWater Hampers saw 75% of their total annual revenue go through peak compared to the rest of the year – which amounts to a sizeable 61,500 parcels shipped during that time.

When the year’s performance is geared towards such a concentrated period of time, it’s vital that retailers can rely on delivery to be seamless. Getting delivery right during this period means happy customers, who will have an increased loyalty to the brand – get it wrong – and they’ve lost a customer for good. You can see how, when this example is extrapolated to thousands of customers, it could make a significant difference to the business. That’s why brands like ClearWater Hampers are investing in delivery partners, to ensure they maximise their potential during peak.

Not all brands who live and die by peak are taking the approach of maximising peak however, some brands, such as a leading British confectionary company, are looking to move away from peak-dependency and diversify their revenue; spreading it more evenly across the year. This company saw 60% of their annual sales come during peak in 2018; delivering over 10,000 parcels to 60 different countries. While peak will always be a busy time of year for the company, it’s not something they want to be dependent on. But whether you’re peak-centric or not, the basic principles of getting delivery right still apply.

Plan for the inevitable

No matter how carefully crafted a retailer’s plan for these peak periods may be, things will go wrong and it would be naïve not to have a contingency plan in place. The peak period is prime time for adverse weather conditions or unforeseen problems with a fleet of couriers. These sorts of issues could drastically impact the entire supply chain and could hamper a retailer’s ability to do business effectively. In these moments, it’s vitally important that brands take a multi-carrier approach and have the tech in place that allows them to manage their carriers in real-time. If snowy conditions are preventing a fleet from making it to the warehouse to pick up their orders, retailers can navigate this problem by deselecting that fleet and allocating the order to another carrier who is able to make the shipment. It’s this agility and ability to adapt to problems with carriers that will allow retailers to successfully deliver on their promises during peak.

Click and collect

Where possible, it’s a good idea to encourage click and collect to drive footfall to the store and reduce the delivery burden. With the warehouse as busy as it is, any opportunity to alleviate some of that load is worth taking. Furthermore, it benefits the retailer in other ways as it gets more customers spending time in physical stores, showing them more products and potentially securing more sales.

Choice and convenience at checkout

With the sheer volume of deliveries taking place over the peak period, there’s a lot that could go wrong and ultimately leave the customer dissatisfied with their experience – don’t let delivery options be that reason. Most customers have reasonable expectations but if the delivery options at checkout are unclear or simply just prohibitive, then that customer is well within their rights to be disappointed with their service.

Transparency and communication of delivery from checkout to doorstep is vital in managing expectations, and when delivering abroad, particularly after Brexit, businesses will need be clear on the cost of duties and taxes. Most importantly, if retailers want to satisfy their customers, it’s about offering that breadth of delivery options so that customers can choose the option that best suits them. Offering a wide range of choices at checkout means that customers can find something that is convenient for their needs. That’s what will drive sales during peak.

In terms of learnings from peak 2018, it’s important to realise that the period means different things to different brands. The main point to take from 2018 however, is that whether peak means survival or just a boost in sales, it’s good practice to source a delivery partner that enables you to broaden your delivery options and gives you the agility to cope with any problems that may arise.