4 lessons learned from Black Friday.
Won’t let delivery capacity become a bottleneck.
Over the past few years, we’ve seen an increase in online orders in general, and naturally, a spike during the holiday season. The year 2020 was not going to be any different, except for the fact that the world was suddenly facing a pandemic which has played an obvious role in an even steeper growth of the expected shipping volume.
But should any of this come as a surprise? The simple answer is no. Capacity during peak-season was already a challenge five years ago and there is a good chance it will still be an issue in five years from now.
Back in March, when the pandemic hit Europe and North-America, nobody was prepared. Online sales increased massively overnight and it didn’t surprise anyone that capacity reached its limits in terms of stock, warehousing, and especially in terms of last-mile delivery.
But this is extremely similar to how the average holiday season looks, so how did things go during peak season 2020?
In March, at the start of the pandemic, the Paazl platform saw a shipping volume increase of 155% YTD. We reached all-time-highs on Black Friday 2020 with a volume that was 226,4% more than the shipping volume of a normal Friday in 2019.
Looking at the market in general, Salesforce predicted that the total number packages to ship in the United States during the holidays (700 million) was already 5% more than the delivery ecosystem was capable of handling. No surprise that delivery carriers were turning down new customers or charging extra for parcels that were being shipped in the last weeks of December to cover the cost of increasing their delivery capacity.
Despite all the efforts to increase their capacity and the fact that most companies saw it coming, loads of parcels were not delivered on time, which is bad news for everyone — the consumer, the online retailer and the carrier. Finding this out when it’s too late can be catastrophic to all involved.
Paazl has worked closely with hundreds of brands & retailers over the past months to make sure that delivery wouldn’t be the bottleneck in their online operations. We looked at the market, we spoke with our customers and we prepared our own platform.
Here are the main 4 things that we’ve learned,
- Expect the unexpected. And plan ahead. Nobody owns a crystal ball, but we can prepare for situations that are not so likely to happen. A nice way of preparing for the worst thing that can happen is to organize a “war game”, usually used by the military as a serious tool for training or research. Make it a teambuilding activity and have a plan in place for the moment where your shipping volume reaches +1000%
- Don’t bet on one horse. Have a backup plan for whenever your delivery partner(s) run into trouble and make sure you are able to switch delivery services -or carriers in the blink of an eye whenever necessary.
- Spread your volumes wherever possible. Persuade your customers to spread their buying sprees so you won’t have to fulfil all orders in one week(end). Offer nominated day delivery for customers who can wait a couple more days (you can even experiment with different shipping rates) and spread your volume over multiple carriers to make sure you have enough capacity to ship during peak moments.
- Communication is key. Whatever you do, make sure to inform your customers in the best way possible. Start at the checkout by communicating expected delivery dates (not the same as shipping speed), offer options for nominated days and if you’re not sure about the exact date, offer day-ranges to make sure you deliver on your promise. Last but not least: make sure you communicate with your customers with good track & trace e-mails that are coming directly from your brand to build a relationship of trust with your customers.
Some additional advice: GO GREEN. Consumers are becoming more aware of the environmental impact of delivery and Black Friday hurts our planet even more. Delivery with electric vehicles, ship-from-store concepts and bike-delivery is growing rapidly. Consumers are willing to pay more and wait longer for sustainable delivery so make this your competitive advantage and automatically lower the volume or your regular shipments during these busy times.
Written by Luke Theissling and published at www.paazl.com/blog, December 2020.