'Black Friday places a huge logistical challenge on retailers'

Despite almost a third (30 per cent) of the estimated 30 million Black Friday orders this year being click and collect (in store and via a collection point), the additional 17 million orders for home delivery – compared to an average day - are set to drive an additional 210,000 van deliveries.

These figures are released today (19th November 2018) by management and technology consultancy, BearingPoint, who also reveals that Black Friday will generate in excess of £1.5 billion of online sales this year – an anticipated increase of 12 per cent over 2017. As a result of the increase in online sales, retailers and their third-party logistics providers will need to cope with an increase of over five times their usual daily home delivery volumes.

BearingPoint warns that one of the consequences of online ordering is that around 20 per cent (6 million) orders worth £300 million will be returned following Black Friday – just when retailers and their logistics providers are gearing up to fulfil Christmas orders.

Stuart Higgins, partner at BearingPoint said: “Black Friday places a huge logistical challenge on retailers, with massive incremental volume peaks on the day itself combining with a returns surge just as retailers are managing the subsequent Christmas peak. This could explain why more retailers than ever this year are moving away from Black Friday as a single day event and instead spreading promotional activity over several weeks leading up to Black Friday to smooth demand and costs.”

Indeed, IMRG has coined the phrase 'Blackvember' to encapsulate this trend.

BearingPoint says that customers now expect seamless returns processes, with all retailers experiencing pressure to move towards a free and efficient returns policy. Whilst an on-cost in the short term, smart retailers are recognising that, by accommodating customer desires for seamless returns operations, they are maximising the lifetime value of the customer to their business.

These smart retailers offer:

• Returns ready packaging and inclusion of pre-paid returns labelling in the original order to ease the returns process for the customer.
• Efficient receipt of returns to speed up customer credits, helping to alleviate customer anxiety and refunding cash to enable fresh purchases.
• Fast and efficient sorting, grading and re-processing of returns back to stock to increase the likelihood of being able to re-sell within the core selling season, reducing the risk of markdown and clearance at the end of season.

Stuart Higgins, partner at BearingPoint concluded: “Returns are now expected to be seamless … with a frictionless returns process being rated almost as highly as delivery capability when customers select which retailer to shop with.”