The holiday season has always been the busiest time of the year for retailers.
Some make as much as half their annual revenue in just two months. On top of this, due to the pandemic, ecommerce uptake accelerated in 2020, with more and more consumers across the world choosing to buy online.
This brings a world of opportunity for ecommerce businesses; customers thousands of miles away can shop with you. According to research by FedEx, 68% of small businesses in Europe see an opportunity to sell to new customers.
But those opportunities come with a challenge, too. More orders means busier fulfillment operations, more complex deliveries and a greater number of returns.
Here, we take a look at the growing demand for ecommerce in peak season, and how to properly prepare so you can take advantage.
The power of peak season.
Globally, ecommerce sales in the holiday period hit $1.1 trillion in 2020, up 50% over 2019.
In the UK, ecommerce sales were up 74.7% in November and 61.4% in December over the same months the previous year, according to data from the Office of National Statistics. In Europe, ecommerce grew by 72% in Q4 2020, according to Salesforce.
Ecommerce is accounting for a larger proportion of total retail, while many seasonal retail events have evolved from a single day to last a week or more.
Peak season can open your business up to exciting new opportunities – but how can you make sure you’re prepared to handle the high volumes and tight deadlines it can bring?
Peak season at-a-glance.
2020 was a record year for peak season ecommerce sales, and 2021 is set to be bigger still. That means being on top of the busiest shopping days is vital, giving you time to ensure your supply chains and operations are prepared for the additional demand.
Here’s a brief look at the key peak-season shopping days:
Halloween (31 October)
It may not be a gift-giving occasion, but Halloween can still drive an uptick in sales for consumer-facing ecommerce businesses, especially for customers in the UK and North America. It can also be a good indicator of consumer sentiment for the rest of the holiday season. In 2020, according to the U.S. National Retail Federation, although fewer consumers planned to celebrate Halloween, those that were celebrating intended to spend more than in previous years.
Singles’ Day (early November)
The retail event launched by Chinese ecommerce giant Alibaba officially takes place on 11 November. In 2020, however, many retailers began their Singles’ Day offers at the beginning of the month. Alibaba and local competitor platform JD.com together made around $115 billion in sales during the event. It’s rising in popularity in the West, too. In the UK, Singles’ Day sales grew an estimated 12% between 2019 and 2020.
Thanksgiving, Black Friday and Cyber Monday (late November)
Although only a public holiday in the U.S., Thanksgiving and the days around it have become major retail events for businesses around the world. According to a 2020 McKinsey survey of global consumers, more planned on participating in Black Friday sales than in any other retail event of the holiday season. Globally, consumers spent 116.6 million hours shopping online on Black Friday, 20% up on 2019.
And that’s reflected in the sales figures. Worldline reported that Black Friday e-commerce sales were up across Europe compared with 2019: in Germany by 50%, in Austria by 45% and in Belgium by 40%.
According to the Centre for Retail Research, ecommerce sales in the UK were up 56% in the run up to Christmas 2020 compared to 2019, partly due to lockdown measures preventing consumers from shopping in store. Globally, sales in December 2020 grew 24% on the same month the previous year.
All together, these retail events make for an e-commerce peak season that is longer and busier than ever before. And while that brings additional challenges, it also offers unrivaled opportunity to grow your ecommerce business.
Related reading: Holiday Ecommerce Preparedness Guide for 2021
Understanding customer expectations.
Customers’ expectations around ecommerce continue to reach new heights. More than 40% of consumers across the world see fast, reliable delivery as a priority, and a third want a good returns policy, according to PwC.
They also increasingly want a personalized experience. In a recent survey of 10,000 customers across 16 European countries, 74% said they wanted to receive more personalized content when shopping online.
And they have specific expectations in peak season, too. Consumers have become used to receiving offers and discounts during retail events such as Black Friday and Singles’ Day. According to a 2020 survey by McKinsey, almost 40% of shoppers planned to increase their spend on blockbuster shopping days, citing better prices and promotions as a top motivation.
Customers also expect those offers to last longer. Google found that Christmas- or Black-Friday-related searches in the UK began earlier in 2020 than in previous years.
The extra demand during peak season has brought challenges for businesses, however. According to one estimate, the gap between demand and supply for e-commerce shipping capacity was around 7.2 million packages per day throughout the 2020 peak season.
Here are some of the other customer expectations retailers face during this busy time, so you know how you can adapt your business to meet them.
Delivery options: giving the gift of choice.
Offering multiple, convenient delivery options is key to meeting customers’ expectations. According to Linnworks’ research, 95% of shoppers cite convenient delivery options as a major factor in their purchasing decisions.
Elsewhere, one 2021 survey found that offering the right delivery options led to 38% sales conversions. Customers are split on whether cost or speed is their top priority: 35% of respondents said low-cost deliveries was most important, only slightly ahead of the 33% who said speed was most important.
Increasingly, customers also want to be able to get their products wherever is most convenient to them. Google searches for “available near me” more than doubled in the year to June 2021.
That means that offering customers flexibility when it comes to deliveries could help set you apart in peak season. With services such as FedEx Delivery Manager, you can give them the ability to manage their deliveries to home or to a wide network of pick up and drop off points, and provide full visibility of their shipment with automatic notifications.
FedEx also offers online shoppers the chance to choose from 15,000 FedEx pick-up locations across all key markets in Europe.
In Asia too, the number of pick-up points and lockers is increasing. Meanwhile, in North America, 90% of U.S. residents are within 8 kilometres of a FedEx retail location so they can collect their FedEx deliveries at a suitable place (FedEx Ship Centers, FedEx Authorized Ship Centers and retail locations across the U.S. and Canada) and time.
Here are three more tips to set your deliveries apart in peak season:
- Keep customers informed
According to one survey, 86% of consumers said that being able to track their deliveries was “important” or “very important”. Allowing customers to see where their order is in real time could give you an advantage.
- Offer a free shipping option
Cost of delivery is a decisive factor for consumers when it comes to choosing where to shop online. Consider offering free shipping for orders over a certain threshold. Data shows that consumers are more likely to buy an extra product if it means they qualify for free shipping.
- Encourage early orders
The volume of packages being sent during peak season is so high that delays can happen. To make sure your customers have everything they want in time, send email reminders or even offer incentives to encourage them to place their orders by a certain date.
The returns conundrum.
With ecommerce sales expected to continue their upward trajectory in the 2021 holiday season, it’s inevitable that returns will increase, too. The returns rate for e-commerce purchases can be anything from 15% to 40%.
Following the peak sales period, they can be even higher. In the UK, returns following the festive period were predicted to be 63% higher this year than in 2020. Meanwhile in the U.S., returns during the 2020 holiday period were up 41%.
A retailer’s returns policy is important to consumers when it comes to choosing where to shop online. In a 2020 survey, two thirds (68%) of consumers globally cited it as one of the top criteria they look for when deciding where to buy.
That means that offering free, convenient returns could help put your e-commerce business ahead of the competition during peak season. Here are a few ideas for how to do it.
- Include returns labels with the original package
Sending a returns label along with the order saves your customer having to download and print one themselves, making the returns process more simple. Choose a delivery partner that offers this feature. For example, FedEx Global Returns allows you to create returns labels and customs documents to send along with the original order.
- Offer returns from multiple locations
In a 2020 survey of U.S. consumers, 46% of the respondents who rated their most recent e-commerce returns process as “easy” did so because they were able to drop the package off at a convenient location. FedEx Global Returns allows customers to schedule return pick-ups online or find a nearby FedEx parcel drop-off point.
- Ensure visibility across your returns
Products being returned affects your overall stock levels and warehouse staff capacity, so it’s important to stay on top of what is coming back to you and when.
5 top peak-season shipping tips.
Meeting your consumers’ increasingly high expectations at the busiest time of year is undoubtedly a challenge. However, with thorough planning and the right tools in place, you can take full advantage of the opportunity to win over new customers and convert them into repeat business.
1. Use historic data
Look back at figures from 2020 to guide your preparations. When was the busiest day for e-commerce orders during Cyber Week and the run up to Christmas? Do your suppliers and logistics partners have the capacity to handle a similar level of orders? What was your average order fulfillment speed?
2. Have contingencies in place
During these peak periods, unexpected delays or product shortages from your suppliers could have a greater knock-on effect on your business. To minimize the impact of any unexpected challenges, have backup options for everything from product and materials suppliers, to alternative discounts and promotions.
3. Ensure you have end-to-end visibility of stock
Taking full advantage of peak season means staying on top of inventory levels. If you don’t, you run the risk of receiving orders you’re not able to fulfill because you don’t have the stock keeping unit (SKU) in stock. Integrated inventory technology tools give you oversight of your stock levels, with alerts for when inventory of products drops below a certain level.
4. Prepare your fulfillment centre
Make sure your warehouse or fulfilment centre is set up to process peak season orders as efficiently as possible. Ensure that the products likely to sell well – such as seasonal items and products on promotion – are easily accessible for order pickers. Use order data from previous years to guide you on which products will be top sellers during the holiday season.
5. Automate as much as possible
Manual operations – especially during busy periods – often lead to mistakes happening. And errors cost your business money, whether that’s time and labour spent on correcting it or losing an unhappy customer. To avoid costly mistakes, automate as much as possible in your operations. FedEx Electronic Trade Documents (ETD) allows you to submit your trade documents ahead of your international shipments, you can expedite customs clearance and allow for a quicker documentation review. You are notified earlier of potential errors or missing paperwork and reduce the risk of your shipments being delayed.
With some careful planning, the right tools in place and a reliable network of partners, you can prepare to take full advantage of all the opportunity peak season has to offer your business.
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