Kicking off The Delivery Conference unsurprisingly immediately focused on the peak and in particular Black Friday 2014 and how it affected couriers.
Dwaine McDonald CEO of DPD opened up stating that with the media whipping consumers into purchasing no one wins. The attitude appeared to be that if you didn’t buy that day then Christmas would be a failure for your family.
Dick Stead, CEO of Yodel added that volumes dropped mid November just as they were training their Christmas staff and then when Black Friday hit they met all their targets. Unfortunately retailers had massively underestimated the targets and DPD agreed that volumes were way up.
The reality is that Black Friday poses enormous challenges on how retailers and carriers handle Black Friday in 2015 according to John Roberts of AO.com. What appears to have happened in 2014 is rather than a slow sustained build up to peak, consumers held back for Black Friday and then sales tailed off towards Christmas.
The issue is for most carriers and particularly DPD is that everything is expected to be delivered Next Day. Next year they aim to open up their Interlink deliveries on Saturday and Sunday as well as DPD. They are simply going to have to work differently next year.
Dick Stead asked the question “How necessary is a 24 hour delivery service?” He suggests that retailers need to be up front on their websites giving transparency and pointed out that most consumers weren’t worried about next day delivery but simply wanted to know when their parcels would be delivered. He contends that most consumers wouldn’t necessarily select next day delivery but retailers directed consumers to this option regardless.
That does raise issues with sites such as eBay as well as for the retailers themselves in building in up front information for consumers letting them know when they should expect a delivery. Martjin de Lange from Hermes suggested that retailers need to smooth out their despatches. One option of course is for retailers to simply ship a set amount per day regardless of volumes and simply delay Black Friday shipments a few days once a certain volume is reached. This coupled with couriers working 7 days per week would help ease the load and mitigate the effect of Black Friday.
The big question is do your customers need next day delivery around the Black Friday peak, or do they just need to know that their items will be delivered in time for Christmas?
John Roberts however had one final point to make, why should he take out his companies 24 hour delivery promise when his competitors still offer it. He doesn’t see how he can pre-judge whether his customers need next day delivery and certainly doesn’t want to lose sales by not offering it. That brings us full circle back to Black Friday 2015 and the expectation that it will be even bigger than last year, that everyone will expect next day delivery and carriers will be hammered once again.
DPD suggests that maybe even 24 hour deliveries could be the solution, that’s not delivery next day, but having delivery drivers on the road 24 hours a day so some deliveries could be made at 1am at night or 6am in the morning. Innovation is key and whilst planning by couriers and retailers is still in the early stages, the one thing that we do know is that the Black Friday peak in 2015 is going to be interesting.
3 Responses
until sellers stop using delivery as a marketing tool rather than quality or price, its always going to be a headache for delivery companies
All this often comes down to over promising customers. A founding principle of good retail and customer service is to never over promise, if I said to you your order will be with you in 2-3 days and it then arrived next day you would be pleased and think that was great as it arrived early. If you say it will arrive next day and then take 2-3 days you are not going to be happy.
I am afraid this is where ebay has gone seriously wrong with delivery estimates and this annoys customers, I never have and never will understand why they think they know more than the likes of Royal Mail.
I agree with Stuart. Also retailers were guilty of over trading for Black Friday. So customers were dissatisfied, particularly when it affected later shipments from Click and Collect retailers.
It would be interesting to know how much stress testing retailers put into their processes to see what they really could handle for Black Friday. It should not be that difficult to match known effects of price discounting, against likely increased buyer attention over that weekend, against despatch capability, and come up with some kind of result that says “We need to discount no more than x% to achieve all the business we can handle”
I took a view I could not handle more than whatever the day produced, so made no offers at all. I was stretched for 24 hours, but met every commitment I made. Maybe that is why I’ll never be a millionaire!
Interesting Stuart’s comment on ebay – ebay base all their practices on market research – “the customer tells us they want …..” But I think the results are sadly lacking because the questions aren’t right. The customer has to be asked also how much they would be prepared to pay for their ideal scenario.
It would be very interesting to know Amazon’s split between Prime, First Class and Saver Delivery. It would be a good measure. What percentage of customers are prepared to pay extra for delivery, and what percentage opt for the cheapest? Does anyone know?