Here’s what retailers learned from 2014
Black Friday 2014 crashed many UK web sites and supply chains. The e-commerce delivery specialist ParcelHero reveals how retailers have responded to the IT and logistics nightmare three years on.
November 24, 2014, is a date seared in the memory of many retail and supply chain professionals. As High Street stores such as Asda saw near rioting over bargain TVs, etc, huge numbers of consumers abandoned the scrum and went online. The e-commerce fulfilment specialist ParcelHero says what happened next was near e-commerce carnage; many retailers’ supply chains were woefully unprepared for the sheer volume of orders.
David Jinks MILT, ParcelHero’s Head of Consumer Research said: “As shoppers fled the High Street for the safety of their home and office PCs, many retailers experienced record orders. Black Friday shoppers spent a then-record £810m online, creating backlogs which overloaded courier networks and crashed into the following Cyber Monday online shopping bonanza.”
Jinks revealed: “For retailers sales and marketing teams it was a dream come true, but for their IT and logistics teams it became more of a nightmare. All those £810m worth of items moving at the same time caused multiple warehousing, web and final mile delivery issues.
“The huge volume of orders caught many of the UK’s most respected brands off guard. The likes of AO.com, River Island, Currys-PC World, Shop Direct and Debenhams all admitted to disruption to their delivery networks in fulfilling the record amount of orders.”
Even the e-commerce leader Amazon found itself overstretched. Jinks said: “Remember Amazon, which now delivers seven per cent of all UK packages through its own Amazon Logistics arm, was still using the Royal Mail and the existing courier networks almost entirely. It was undoubtedly one of the reasons they made such a huge investment in deliveries in the following years.”
But worst hit of all was the national institution of Marks and Spencer’s. The international news agency Reuters revealed M&S was unable to cope with a surge of orders around its Black Friday promotion, and had to entirely cancel its next day delivery service for some time. Black Friday hit at the worst possible time for M&S. It’s new £200m state-of-the-art distribution centre at Castle Donnington had just opened in time for Christmas, but was experiencing some early, significant, teething troubles.
Jinks reveals the demand for M&S Black Friday deals was leading to crashes on its website while consumers were ordering. “This was the first year M&S had gone big on Black Friday, launching a four-day sale online and in stores. The year previously M&S had held off its online offers until the second week in December, and the Black Friday demand took it by surprise.”
The press was not long in turning on the beleaguered company with The Daily Mail reporting: “Marks & Spencer’s £200m warehouse in Leicestershire – which is capable of shifting 1m products a day – has been unable to cope with demand from a glut of orders from the firm’s Black Friday sales promotion.
“In the crucial run-up to Christmas, shoppers have now been told next-day deliveries to stores could take up to four days and standard deliveries to the homes of customers will be within ten days rather than the three to five promised.”
Jinks continued: “Happily, M&S thoroughly absorbed the lessons of 2014 and is now one of the best stores at getting its Black Friday online offering together. Last year it launched its offers several days before Black Friday, smoothing the supply chain and ensuring shoppers don’t all visit the site at the same time, by ensuring a steady trickle of offers. It’s a model a number of other retailers have also successfully followed.”
Such has been the success of the strategy that last year the UK’s Black Friday online sales grew to £1.23bn, yet there was no repeat of the delivery meltdown of 2014. That’s because Black Friday had mutated into a whole week with online sales from Monday 21 November to Monday 28 November reaching around £6.5bn.
And shoppers have responded well to the change of emphasis. A recent Accenture survey showed 44 per cent of consumers are less motivated to shop on Black Friday because they can get as good a deal on other days during the week.
Jinks concluded: “That’s bad news for those hardened shoppers who like the High Street scrum or the sheer thrill of pouncing on a deal as soon as it pops up. But for most consumers and supply chain professionals it is good news; and means the final brightening up of Black Friday.”