UK retailers must brace supply chains for the Black Friday effect to avoid bearing the brunt of disgruntled customers and negative publicity, experts are warning ahead of tomorrow’s retail event.
With £556m expected to be spent online, UK retailers should ensure their supply chains can handle a spike in demand, according to Venkata V, global practice head for retail solutions at ITC Infotech.
“UK retailers are already bracing their logistics operations to handle the Christmas rush, which can see as much as 70% of yearly sales volumes achieved in the last two weeks of December,” he says.
“However, with the US expecting one of the biggest sales periods in history this Thanksgiving, the UK should be prepared to see a spike in demand and more strain on their logistics. Even retailers not offering specific Black Friday discounts themselves can expect more demand as shoppers are inspired to hunt for Christmas bargains.”
The rapid escalation in demand created by sales events like Black Friday can be extremely lucrative, but also cause havoc on unprepared supply chains, as demonstrated by China’s recent Single’s Day event.
The country’s biggest sales event saw the e-commerce leader Alibaba rake in sales of over £9 billion, but the day has previously slowed down delivery times from two days to over a week.
Saravana Kumar who heads Supply Chain consulting in ITC Infotech commented: “Marketing, production and logistics teams should work closely together to make sure their operation can handle increased demand on the 28th of November, especially as they are likely to already be stretched by the Christmas period. Flexible retailers have a strong opportunity to capitalise on the sales event by reacting to demand and adjusting their pricing strategy on the fly, increasing and lowering prices as needed.”
Paul Doble, chief sales and marketing officer of logistics firm DX agrees. He warns that retailers with an online presence are in danger of overwhelming the capacity of their distribution networks and run the risk of leaving unwelcome spaces under the nation’s Christmas trees.
“As such, throughout the busy Christmas trading season, retailers must try to forecast as accurately as possible the volumes that will need to be sent, and then communicate these expectations to their logistics partners, who will take up a huge percentage of this volume,” he adds.
“The alternative is the situation many retailers have faced in previous years, where through a combination of inaccurate planning, poor communication and unanticipated weather conditions, demand outstrips capacity and leaves retailers unable to meet their promises to online shoppers.”