The effect of Black Friday on retailers’ ability to fulfil orders has been well documented, but how retailers and their supply chain respond in 2015 is crucial.
Black Friday 2014 has been the subject of much discussion, debate and disagreement in the industry as retailers and their supply chains consider whether the surge in online sales was worth it.
According to figures from the IMRG Capgemini e-Retail Sales Index, Black Friday led to the lowest-ever online sales growth in December, which saw online sales increase just 5% year on year.
Overall, online retail grew 14% in 2014 compared with 2013 as shoppers spent £104bn online, breaking the £100bn mark for the first time. But Black Friday focused high volumes of sales activity in the final week of November instead of the more traditional December surges.
“The challenge going forward is that Black Friday has been cemented into shoppers’ consciousness and they will expect the same kind of focused discounting next year. As an industry, we will need to work together to understand how this extreme activity spike can best be managed in the interests of both shoppers and retailers,” said Tina Spooner, IMRG’s chief information officer.
The effect on delivery
The knock-on effect this had on the retail supply chain and Christmas delivery has been well documented, and many retailers are now considering, just as Spooner says, how they can better manage seasonal delivery surges.
While some commentators suggest there is simply not enough capacity across the delivery network in the UK to deal with the level or orders that came with Black Friday and Christmas combined, others believe this year’s event will be much smoother because retailers and delivery companies are better prepared for the surges.
John Lewis’s online director Mark Lewis said: “There is no doubt that this year highlighted a new shape of trade over the Christmas period. Black Friday was John Lewis’s biggest ever week for sales in our 150 year history. Online sales broke records on the day itself and during the early hours of trading there was a 300% increase in traffic to the John Lewis website.
“Looking to the year ahead, we expect to see convenience remain high on the list of customer needs and in turn both online sales and click-and-collect volumes remain strong. With this comes the need for a solid back office function both in IT and distribution and this remains a key focus throughout 2015 to ensure we meet continue to meet customer demand.”
So will we see the rise of other methods of fulfilment alongside home delivery? And do retail supply chain partners need to be more innovative to get ahead of this year’s big events? However retail supply chains respond to Black Friday 2014, one thing is clear; Black Friday is here to stay.