Over the peak Black Friday and festive shopping season in 2022, GFS kept a hawk’s eye on the industry to gather carrier and industry coverage for their weekly Peak Bulletin, with their insights as well as commentary from authoritative industry voices.
Today, Bobbie Ttooulis, Group Marketing Director at GFS, takes a look at the key takeaways from how the ecommerce industry performed on the whole — parcel volumes, challenges and wins for carriers, retail shopping behaviour and what the experts were watching out for.
Retail Round-Up
Initial feedback from many eCommerce retailers was that they were expecting Peak to run very late with the anticipation that a large number of shoppers will hold out until the final week before Christmas.
Initial growth in parcel volumes was seen across the fashion sector with a majority of leading retailers promoting Black Friday sales discounts, and several offering over 25% discounts.
Over the coming days it became clear that shoppers clearly defied the cost-of-living crisis to leverage Black Friday deals. It is possible shoppers cut back on luxury purchases to focus on more essential purchases available on promotion.
UK shoppers were potentially overwhelmed with intense Black Friday messaging, but interest is still up as consumers are trying to find the best deals they can to save in the run-up to Christmas. Online searches for Black Friday sales rose by a quarter since last year as customers looked to save money (Audit Lab) and leverage deals.
As we inched closer to the festive shopping season, strong growth still continued across the week in the fashion sector; and while gifting had seen a slower-than-expected start to peak, volumes kicked in over the last one week up to the forecast trading levels.
Overall, it seems that buyer shopping was not concentrated just over the weekend, which is usually the predominant time, and instead, shoppers were placing orders across each day of the week.
Parcel Volumes: Pumped Up or Toned Down?
● The early commencement of Black Friday sales helped drive volumes, with Week 1 (Week 46) raking in the highest volumes of 2022 up to that point in the year.
● Week 2 of Peak (Week 47) saw parcel volume increase by over 20% versus week 46, which was exactly in line with the week-on-week growth seen in 2021. While there were fluctuations in the forecast volume by day, volumes across the week are in line with the latest forecasts.
● Come Week 3 (Week 48), headline volumes were in line with forecasts but significant variations were seen across retailers and carriers with volume swings due to the Royal Mail strike on Black Friday resulting in a surge of volume entering carrier networks on Cyber Monday.
● Some carriers have suggested their volume on Cyber Monday was far greater than forecast, with many retailers switching volume from Royal Mail.
● Volume across this weekend was 30% lower than the Black Friday weekend; this was to be expected as fewer retailers were working over the weekend with a reduction in weekend collection requests.
● Black Friday sales volume was flatter than expected with lower sales across the weekend running into Cyber Monday. As we’ve mentioned before, this could be a direct result of Black Friday sales starting much earlier in 2022 with volume spread over a longer period.
● Weeks 4 and 5 (Weeks 49 and 50) remained consistent with the week-on-week trading patterns seen in previous years. With sales volumes transitioning from Black Friday/Cyber Monday offers into gifting volume, with hampers coming into the delivery mix and helping to boost overall volumes.
Carrier Watch
- Right from Week 1, carriers were bracing for significant operational challenges with planned Royal Mail strike action on Thursday and Black Friday. Carriers had to direct focus towards protecting network service performance through the Black Friday weekend.
- As we moved into Week 2, collection service remained strong, with parcels being processed in good time and no reported issues from Hub networks. Some carriers did face some service challenges in postcode pockets across the Depot networks, but that was quite insignificant to the total parcel volume being processed.
- The increase in parcel volume in Week 3 meant some carriers advised there may be a one-day delay in delivering to some postcode locations.
- A big challenge carriers faced was courier recruitment in the areas impacted by strike action, which meant some carriers had to resort to increased incentive payments for people joining, with loyalty bonuses for working through until Christmas.
- In Week 4, carriers reported a strong weekend delivery performance. But then came the impact from the snow, while carriers were still grappling with the diverted volumes from Royal Mails. But carriers continued being resilient and working round the clock to minimise delays, and we saw this clearly with strong performance coming through from the Hubs.
- Overall, very strong deliveries over the last weekend helped further reduce volumes across the carrier networks. The final delivery week before Christmas saw lots of depots go into special measures, with fringe impacts from motorway accidents, etc.
Peak Panorama from the experts
IMRG tracked 305 retailers every day over Black Friday to monitor their campaigns.
The total market defied the gravity of extenuating circumstances, such as the cost-of-living crisis and the World Cup clash, scoring a positive territory revenue result of +0.3% YoY (Year-on-Year), albeit still very low.
While clothing generally performed better than other online retail categories throughout 2022, in the last little while its growth has dropped away. In Black Friday week the category performed worse than expected (0%), at -1.1% YoY.
In comparison, health & beauty had a fantastic time considering it was one of the earliest categories for live Black Friday campaigns this year. In keeping up the weekly momentum, the result was +3.8% YoY.
Simultaneously, electricals had their fair share of joy as they experienced a growth of +2.8% YoY. Perhaps they have the football extravaganzas to thank!
While it is not as steep as we predicted, home & garden did see a decline of -0.7% YoY. This negative territory figure is compared to 2021, a pandemic year that saw more customers stuck indoors, and thus they might already have relatively new furniture.
For a complete round-up, read all the issues of the Peak Bulletin at https://gfsdeliver.com/blog/
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