joomla counter

Black Friday – ‘e-commerce shift from high street even bigger than expected’

Rate this item
(0 votes)

Carl Lomas IOC Chair speaking on Black Friday, ‘As retailers extend Black Friday the logistics companies await figures to see how big 2015 peak for home delivery will be. A week of poor weather, rain & in the wake of the Paris terrorist issues, first vision is consumers are staying at home and buying on line in the safety, warmth and comfort of their arm chairs. This could create the biggest home delivery numbers so far in the four year history of UK Black Friday.’

 

 

‘It was a slow start on the high Street for Black Friday, stampede for bargains failed to materialise. Security and shop staff had outnumbered customers at many stores in the morning as shoppers opted to make their purchases online rather than venturing out in the rain.’ (Andrea Felsted FT.com)

Dick Stead Yodel, (quoted on Black Friday)

Lots of our retailers have cancelled early trailers.

2015 news nov 27 01

House of Fraser Manchester Piccadilly (formerly Kendal Milne) Black Friday 2015

UK Logistics set to face its greatest challenge yet for 2015 Black Friday.

What is Black Friday, what are the initial responses and what do the key courier logistics players have to say?

‘Cyber weekend’ the extension of USA imported Black Friday sales day. ‘Cyber Monday’, ‘Delivery Tuesday’ ‘Out of stock Wednesday’, variations, including Black Tag week have extended the sale on the last days of November which is the last pre-Christmas monthly pay day in the UK. High street retail form John Lewis, House of Fraser, Debenhams all promoting sales that have extended the Black Friday to an extended weekend. Focused on pay day periods at the end of the month, this sets the retail tone to Christmas. A period of peak for logistics.

For 2015 ASDA who began the UK phenomenon of Black Friday has publicly withdrawn from the Black Friday sales contest. Many other retailers began earlier still, spreading the impact of the sale with Black tag deals on discounted lines. High street electronic goods retailer, Currys started ‘Black tag deals’ Nov 23rd.

Financial times article (22nd Nov 2015) revealed the transformation under way in the UK’s £8.3bn parcel delivery market, which is rapidly expanding in response to the sharp growth in online shopping. Ahead of the discount bonanza of Black Friday (Nov 26)  and Cyber Monday (Nov 30), which kicks off the Christmas peak season, carriers such as Royal Mail, Hermes, UK Mail and Yodel have been preparing to handle an expected £2bn of web orders over the two days — a 30 per cent increase on last year, according to forecasts by Experian-IMRG. Yodel ‘Have your say’ project (June 2015) predicted increases four fold.

Staying in the arm chair for Black Friday, ‘Currys added that it was its biggest ever start to Black Friday, with 7m visitors to its site this week. On Black Friday afternoon, it said the number of visitors to its site was up 70 per cent. Rival electricals retailer AO.com said that by 9am, sales were already double those at the same time on Black Friday last year.’ Retail parks were the biggest losers, with numbers down 8.9 per cent, followed by high streets, down 6.5 per cent, and shopping centres down, 4.6 per cent. (Ft.com Nov 28). In contrast, data from PCA Predict, an address lookup service, showed online activity was up 28 per cent by 2pm.

What the sector says.

Nick Landon, managing director of parcels at Royal Mail,

Royal Mail size and reach play to the company’s advantage in peak season. Our scale allows us to flex up and down in peak season more than other networks.

 

Royal Mail’s national distribution centre in Northampton is old school. Workers wait for metal cages to be filled with letters and parcels, before rolling them across the warehouse floor. While some invent the idea of new green cycle logistics it’s Royal Mail who had the cycle post before all others, moving to trolly cart for household delivery. But changes are afoot as the legacy postal operator clings to its dominant share of the parcel market. The Northampton centre now operates on Sundays and has extended the last time it will accept dispatches from retailers. Royal Mail is also introducing equipment such as “finger scanners” that allow workers to pick up and scan parcels more efficiently, as well as handheld smart devices for 76,000 frontline staff at a cost of £130m. (Logistics manager June 2015)  Automated technology is being launched at its busiest centres and since late summer, some parcels are sorted and labelled by machines so they can be tracked electronically.

Patrick Gallagher, CEO CitySprint,

As a same day distribution company we’re less affected than others by peak volumes (though we do experience a sizable increase), but I’ve been impressed by Tesco’s transparent approach. The retailer has explained to customers that delivery services will be affected by the massive increase in deliveries, which is likely to mean a restriction of same-day delivery, a longer lead-in for click-and-collect, and regular deliveries taking a day or two longer. Although retailers are naturally sensitive about being seen to discourage spending, customers are far more willing to accept slightly altered delivery times than they are failed or delayed deliveries.

John Nolan, director UK Mail,

Our super hub on the A45 is new for 2015, it is in sharp contrast to the Royal Mail model, we have used  best practice technology from across Europe, down to LED lighting in the loading belts that extending into the trucks where operators can see every detail of inbound package.

Carl Lyons, Hermes, head office in Leeds, placed a new, million square foot shed in Widnes, opened summer 2015 as another state of the art shed for central processing ready for Peak 2015.

Dick Stead, chief executive of Yodel, quoted on Black Friday,

Lots of our retailers have cancelled early trailers. Retailers have been incredibly sensible saying it isn’t a one-off?.?.?.?so the volumes of parcels may come but spread over a longer period.

In the run up to Black Friday, Yodel called on large retailers to offer fewer next-day arrivals and will only accept parcel volumes agreed with clients in advance. Yodel appointed a board director dedicated to peak in Jan 2015. The privately owned carrier suffered a consumer backlash last year as some parcels went undelivered for days. As many retailers were caught out and their warehouses jammed with  backlogs, Yodel stopped accepting consignments for two days after being swamped with half a million more parcels than forecast. To avoid a repeat Yodel appointed a board member with individual responsibility for Peak 2015, they have invested £20m to develop a new website, purchase equipment and vehicles, and improve training. It is seeking 7,000 seasonal part and full-time drivers — a 40 per cent increase on last year.

Dwain McDonald, chief executive of DPD, owned by French state-backed La Poste.

Peak delivery season has been pulled forward by two weeks by Black Friday. In our world if you crack Cyber Monday the only thing that can beat you is snow

DPD in the heart of Govt, Leicster LEP territory has one of Europe’s largest parcel hubs, a £100m state of the art facility recently opened in Leicestershire that hints at a future where technology largely replaces labour at the processing core of logistics. For the main, people are only involved in unloading and loading, as well as monitoring the operation from a nerve centre. DPD an express carrier owned by French state-backed La Poste.

Justin Page centre manager for DPD Leicster hub,

You just aren’t going to handle the volumes by sorting manually.

Metallic chutes, stretching almost half a kilometre, ascend diagonally into a mass of steel gantries where conveyor belts whirr overhead. Some of these chutes — called booms — spit out parcels, while others gobble them up. Yet the human hands that feed and tend the machines here are few.

“Peak delivery season has been pulled forward by two weeks,” says Dwain McDonald, chief executive of DPD. “In our world if you crack Cyber [Monday] the only thing that can beat you is snow”. Preparations include investments in hubs, vehicles fleets and recruitment drives — but also attempts to retailers to tone down promises of speedy delivery times. This will be crucial to avoid the chaos that marred some operators’ performances last year and saw the collapse into administration of City Link on Christmas Eve, analysts say.

Frank Proud of consultants Apex Insight says:

It isn’t just high technology. People ran into problems where they didn’t have enough room in hubs or depots and had to pile parcels outside in the rain.

Even so, industry figures say innovation has underpinned double-digit annual growth of recent years at DPD, an express carrier owned by French state-backed La Poste. Three conveyor belts loop its 470m-long “shed”, where a parcel can enter the system, be scanned and sent to one of 172 possible exit doors within 90 seconds. Once running at full tilt, the facility will be capable of sorting 70,000 items an hour and the company expects to process more than 1m parcels on its busiest night.

Last modified on Saturday, 28 November 2015 23:43
IoC