If you watched BBC News this morning, you’d have seen roving reporter Ben Thompson warning that whilst the online shelves will be stocked with toys this Christmas, there will be plenty of choice but perhaps not the exact item you were hoping for – What happened? Are consumers are really being told to be prepared to buy an alternative with the message to shop early or potentially miss out? Has the world come to an end?In the past ecommerce has been the place you could pretty much buy anything any time you wanted it. And you could order right up to the last minute. Bobbie Ttooulis, Group Marketing Director at GFS, has been monitoring the situation and here’s her latest update on what’s happened so far and what retailers should expect from ecommerce as 2021 draws to a close:
Over the last two years, ecommerce businesses have experienced unprecedented sales as lockdowns, remote working and other impacts of Covid19 led customers to spend more money online. In the space of just 12 months, the ecommerce industry saw 5 years’ worth of growth in online sales.
Peak season in 2020 delivered extraordinary sales, as the high levels throughout the year led to ‘peak on peak’ over Christmas. Businesses struggled to predict volumes and carrier capacity, not sure what would be thrown at them next. Challenges continued into 2021, with Brexit, supply chain issues, fuel and driver shortages all leaving ecommerce businesses scrambling to tackle the latest problem. So, as businesses stepped into 2021 peak, it was another year of the unknown. Will peak selling hit the same volumes of 2020? Will we again see unpredictable patterns that don’t follow a traditional peak?
Although its early days, analysis of Black Friday 2021 does help us start to paint a picture of how Peak 2021 will play out.
What happened on Black Friday?
Overall, we again saw strong volumes over Black Friday weekend and into Cyber Monday. However according to IMRG, sales were down by 14% compared to the same day last year. Still, it is perhaps more realistic to compare sales to the year before, rather than unpredictable sales patterns of 2020. So, despite the minor drop in sales in 2021, volumes remain high across eCommerce as more consumers buy online than ever before. However, clearly some industry wide challenges such as stock delays and product shortages may continue to have an impact as Peak continues.
Carrier networks performed well during black Friday, even with Storm Arwen and snow plaguing the country over the weekend. Clearly the extensive planning that took place in preparation for Peak paid off, with many businesses starting planning even earlier than usual. Many carriers such as DPD, Hermes & DHL have invested heavily in infrastructure and staff over the last year, including pop up depots across the country, to ensure they could handle the forecasted volumes.
What does Black Friday mean for Peak 2021?
There is still a question over customer sentiment in 2021. In 2020, a lot of consumers spent more money on Christmas following a year of no holidays, as well as different tier of lockdowns leading to more people buying online. This year it remains to be seen whether consumers overall will spend less. There are also mitigating factors like energy costs and inflation that could affect consumer confidence and stop them going hard and fast on shopping. Shortages are also affecting consumer choices, with 51% concerned over supply chain issues.
Black Friday and Cyber Monday ring in Peak every year and can help us forecast how the rest of Peak will go. Although sales in this period were down, Black Friday is just one day, and it is very likely that peak will come late this year. The week leading up to Christmas looks likely to be the busiest for online deliveries, with Christmas Eve the busiest day.