The Christmas Delivery Boom: How the nation copes with Black Friday

The Christmas Delivery Boom

Born in the US as a shopping free-for-all the day after Thanksgiving, Black Friday is a relatively new addition to the UK retail scene. And despite most Britons not having the day off, the shopping event is taking off like a turbocharged jumbo jet.

On the 27th November 2015, consumers in the UK spent upwards of £1 billion, a full £200 million more than last year.

But, lest we forget, our country is a nation of online shoppers and much of that money exchanges hands, not in person, but online. Early forecasts by PCA Predict suggest that the volume of online sales has doubled compared to last year. And that means, give or take a few in-store collections, double the amount of packages sent out.

And last year wasn’t pretty. The nation’s delivery infrastructure was put under unprecedented stress and eventually ground to a halt under the burden of millions of extra packages.

The chairman of delivery company Yodel, a company not without its fair share of detractors, had this to say: “The marketplace seems to be demanding more and more – such as next-day delivery – and that will drive up costs. The industry as a whole does not have sufficient capacity to deal with short-term spikes or to deal with extraordinary sales activity. If it is to create that capacity there has to be funding from somewhere.”

It was this disparity between supply and demand that cost City Link its existence. By the end they were losing an estimated £500,000 per month, attempting to deal with stacks of extra packages.

Sadly the retail industry doesn’t look to have headed the warning. Most online retailers are still engaged in a race to the bottom, offering knocked down or free delivery on almost everything. Combine that with sharply increasing demand and the result isn’t going to be pretty.

 

A Christmas on Hold

According to supply chain experts LCP Consulting, one in ten Black Friday and Cyber Monday purchases won’t arrive on time. In real numbers, that’s 4.4 million packages floating around in the delivery sector ether and not in their owner’s hands.

Festive retail sales were traditionally dominated by Christmas and Boxing Day sales. However, we now have a string of high activity shopping days stretching from the end of November to the start of January. There is little to no time for the delivery sector to recover and that means demand from one rolls into demand from the other. The problem snowballs and it costs delivery companies money – and in some cases their business.

Julie Palmer of Begbies Traynor said: “This poses a logistical challenge for retailers in fulfilling orders. People will continue to order online and there will be a concertina effect. So the later consumers leave their online shopping, the more risk that they will not get their parcels on time.

“Older orders will be fulfilled first so shoppers who leave it until later will go to the back of the queue and may miss out.”

With 140 million packages, slightly over one per person in the UK, being sent in the weeks before Christmas, websites and delivery companies may be forced to limit or stop their orders.

Of those 140 million packages, an estimated 17 million will miss the delivery slot promised by the retailer. And that simply isn’t good enough.


Did you buy anything online this Black Friday or Cyber Monday? Were you attracted or put off by delivery fees? Let us know on Facebook or Twitter.