Preparing for Black Friday
To accommodate an acceleration in existing online behaviour, businesses should be prepared to spot trends and strengthen supply chains early.
There is no doubt: Covid-19 is set to accelerate existing online trends when it comes to this year’s Black Friday and Cyber Monday.
The ongoing decline in footfall at traditional bricks and mortar retailers means it is ever more important for long-term business survival to review how to process big online events such as these. After the challenges of this year, some businesses may be unprepared for the seasonal boom in sales.
In fact, a survey by online payment services provider PayPal found that almost half of US fashion retailers felt unprepared for one of the busiest sales periods of the year. PayPal recently reported its best ever quarter which underlines just how many payments are going online.
This year’s Black Friday and Cyber Monday are likely to be different for other reasons, however.
Retail consultancy Kantar says that the holiday shopping season is likely to start earlier and last longer. Being driven both by the shoppers not wanting to be burned by out of stock items, lack of pick-up slots and delivery days, and retailers’ desire to spread out demand more evenly, minimise crowds and streamline online sales.
Indeed, several retailers in the US have already announced plans along these lines, including Home Depot, Walmart, Target and Best Buy.
The uncertainty of 2020 has left shoppers and retail professionals feverishly wondering what happens next and if there are any unpleasant twists around the corner.
Last year saw online sales hit $7.4bn on Black Friday and an even higher $9.2bn on Cyber Monday, according to Adobe Analytics, with $72.1bn in sales recorded between 1 November and 1 December 2019 in the US. In the UK, meanwhile, £37.4bn was spent online during November, online retail association IMRG reported.
Putting this in perspective, according to the Office for National Statistics (ONS), internet sales as a percentage of total retail sales leapt from just 2.7% in January 2007 to 26.1% in September 2020.
The trend towards strong online sales is certain to continue into this year’s holiday season, with e-commerce already enjoying a strong year because of online shopping under lockdown conditions with the ONS recording a peak for internet sales in May this year of 32.8% of total retail sales.
Many vendors will already have moved some or all their inventory online. But there are lessons that even established online businesses have had to learn recently:
1. The need for flexible and scalable e-commerce systems was highlighted during the early days of the pandemic. Spikes in demand for specific products left some consumers disappointed as systems were unable to keep up. In addition, the busy period will put the courier partners of retailers under pressure.
2. Many stores have been slow to embrace online, not recognising that moving to a more multi-channel business will boost sales, where customers can switch between shopping online and in store with click and collect services and easier home deliveries.
3. Increased security across all online channels. For transactions, data protection and because fraudulent transactions have soared since the start of the pandemic. Acting early to strengthen consumer-facing systems will prevent having to deal with unhappy customers later and protect a company’s brand. But that is not the only way to prepare.
Businesses will be aware of their responsibilities in protecting staff from the coronavirus by now. But, by taking care of colleagues – through workplace social distancing and deep-cleaning regimes – it can also minimise the risk to a company’s operations. Still, these measures can make running a business more difficult and mean fewer staff members may be able to work shifts.
And this is where working with third-party logistics companies can help, because it helps to secure more warehouse space to operate safely – and ensure that a retailer can make the most of Black Friday and Cyber Monday.
Such companies can help ensure complete supply chain visibility; knowing where goods are in the supply line – in production, in the warehouse, in shops, or distribution centres – helps retailers to ensure that customers are not left dissatisfied by poor customer service, expectations not managed properly, lack of updating progress of delivery or even a lack of availability.
Some services like P&O Ferrymasters – a DP World company –use supply chain agility to offer its European clients a service that allows them to track and trace all their shipments every step of the way. P&O Ferrymasters’ ‘Track and Trace’ system gives clients real-time updates on the precise location of goods transported by rail, road and sea.
Few businesses will want to see a repeat of the shortages experienced at the start of the pandemic when lockdown conditions saw a surge in online ordering. As such, maintaining stock levels and knowing the location of incoming stock will be an important objective for businesses ahead of Black Friday when they need to meet higher levels of demand.
Nobody could have prepared for the Covid-19 pandemic, but your business can be prepared for Black Friday in its wake. By the end of 2020 global e-commerce sales are expected to reach $4.2 trillion according to Shopify but the competition is getting steeper and online behaviours are changing faster than ever before.