It seems that Black Friday in Devon was a platonic affair. “Devon Live” reported: “Couples in Devon won’t be having sex on Black Friday – and here’s why. Women love both sex and shopping, but a spot of retail therapy comes first especially around the biggest day of the year in the shops.”
The West Country apart, there were few Black Friday disaster stories this year. There have been no reports of major delivery failures or crowds fighting over bargains in stores. And that rather suggests that the strategies for managing the huge spike in demand are working – the sale period has been spread out to more than a week and delivery capacity has grown to meet the demand.
IAG Cargo predicted the spike. A spokesperson said: “This year we have seen the highest ever demand for air freight capacity across our network in the run up to Black Friday. There has been a spike in consumer technology deliveries – particularly smart phones and related accessories – from Hong Kong to the UK and fashion retailers have also been shifting significant last minute volumes from India into the US and UK.”
In the event, Black Friday online spending was up 11.7 per cent to £1.39 billion, according to IMRG. And Metapack has reported that deliveries over the cyber weekend were 26 per cent up on last year.
John Lewis reported a 7.2 per cent increase in sales – its biggest ever week. The Magna Park centre saw a record day on Sunday when it processed 54 per cent more units than the equivalent day in 2016. Across the weekend, it packed on average nearly 13,000 units per hour across the network. On Black Friday itself, the use of the John Lewis App between 12am and 8am increased by 36.8 per cent and during its busiest ever hour for online sales from 9-10am, an average of 705 units were purchased per minute on johnlewis.com.
Delivery company Hermes says it handled 4.8 million parcels over the Black Friday weekend, making it the busiest to date. To meet the demand it could call upon its new £31m Rugby hub plus 85 additional sub-depots. It recruited an extra 4,500 temporary self-employed couriers and added 490 trailers, 230 additional depot vehicles and 160 tractor units to its vehicle fleet.
What is clear is that the big winner of Black Friday week was online, while the high street saw little benefit. According to the British Retail Consortium, total sales in November were up 1.5 per cent on the year before. Online sales of non-food products were up 6.5 per cent while online penetration increased to 27.4 per cent in October 2017 from 26.3 per cent the year before.
BRC chief Helen Dickinson said: “Sales of non-food products that week were over 40 per cent higher than in the other weeks of the month, while it was the biggest week ever for non-food products online. However, rather than increasing overall sales, the event has shifted spending away from other parts of the festive period, and focuses shoppers’ attentions online and away from stores.”
In fact, Paul Martin KPMG’s head of UK retail, has suggested that “retailers are increasingly moving Black Friday away from the high street”.
It is also apparent that Black Friday is expanding out of its traditional consumer goods market sectors.
Sebastien Desreumaux, UK managing director of drinks logistics specialist JF Hillebrand, said that for the beverage industry there were certainly a number of promotions for Black Friday and Cyber Monday. “While the spike wasn’t huge, it was noticeably bigger than last year. We expect this trend to continue and accelerate in years to come. Any major promotion requires greater collaboration along the supply chain to ensure that the stock is available. Products like wines tend to have long lead times since they are typically bottled to order. Effective forecasting and communication with suppliers is absolutely essential to prevent bottlenecks in the production process. A fixed date promotion like this can also galvanise the supply chain – improving communication, tightening up management processes and ensuring the operational side is as smooth as possible.”
Patrick Gallagher, CitySprint group chief executive, said: “Black Friday has served as a timely reminder for the industry that the high-street is continuing to change. Against a tough economic backdrop, there are sure signs that consumers are reigning in their spending. For retailers, the need to remain competitive has never been more critical, and providing customers with convenient solutions from point of purchase through to delivery – and returns – should be a core consideration.”
Craig Summers, UK managing director of Manhattan Associates, highlighted the fact people seemed reluctant to hit the shops as footfall figures for Black Friday were down 3.6 per cent. “There is no doubt that retailers still need to invest in their customer experience, but the boom in online sales begs the question whether customers weren’t heading in store to bag their bargains because the customer experience during busy periods just isn’t good enough.”
Summers also noted a twist to the Cyber weekend numbers: after Black Friday itself, footfall improved during the rest of the weekend. “This is thought to be due to an increasing percentage of online shoppers opting to use Click and Collect as a fulfilment service. Click and Collect certainly drives shoppers to the store and 46 per cent will buy more when they pick up an item, but retailers should be seizing this opportunity to up-sell and cross-sell by engaging the customer from the outset.”
One of the issues with online shopping is that some of what goes out is going to come back – dealing with returns is a critical issue.
And Sorted, the delivery technology specialist, calculated that UK retailers could be facing a £203 million black hole from returns caused by failed deliveries. Its research came up with a figures of £1.01 billion for the value of failed online deliveries
Chief executive David Grimes said: “Consumers already want ultra-fast fulfilment and this is just exacerbated on Black Friday – with failed Black Friday deliveries which don’t meet shoppers’ expectations around speed costing UK retailers £203m in returns”
The net effect of all this is to hasten the reconfiguration of supply chains away from the high street and towards online. Managing that process will continue to be a challenge for retailers and their logistics partners long after this Black Friday has been forgotten.
Malory Davies
This article first appeared in Logistics Manager, January 2018
