NEWS

Warnings for Christmas supply chain chaos as peak trading season beckons

Published on: 29th October 2020

Consumers are being encouraged to do their shopping early, whilst retailers are urged to stagger promotional activity in the run up to Christmas to help alleviate a last-minute rush. 

Christmas

With more consumers avoiding crowded spaces and turning to the convenience of online shopping this Christmas, having already relied largely upon ecommerce platforms over lockdown, this year’s festive season is predicted to see a massive surge in online trading – which lends the question, will retailers and couriers be able to cope?

“There’s no hiding from the fact that this year is going to be like nothing we’ve seen before,” said Yodel chief executive Mike Hancox. “We’ve been operating at peak levels since March, with volumes up 20% compared with a normal year, and are forecasting Christmas 2020 to be another 20% on top of that. Ongoing lockdown measures mean that a large number of consumers won’t be able to see friends and extended family during the festive period, so are likely to turn to online shopping to send their gifts.”

Couriers have been scaling up to cope with this demand, with larger retailers planning for around 30% to 40% growth in online volumes. Carl Lyon, Hermes chief operating officer, said the company has added four new hubs, 1,000 more trailers, eight new depots, and more than 10,000 people after it experienced five years growth in five months earlier this year.

Retail giant, John Lewis, has added an additional fulfilment centre to its portfolio to increase capacity in the run up to Christmas. Some of its existing distribution centres are expected to fulfil online orders of over +300% compared with last year.

To ease demand and avoid supply chain chaos this Christmas, consumers are being encouraged to do their Christmas shopping early, and retailers are urged to stagger promotional activity in the run up to Christmas to make shopping earlier worthwhile.

DreamToys announced its Top 12 Toys and full list earlier than usual this year in an attempt to get shoppers making purchases well before December. In the announcement, as reported by Toy World yesterday morning, Gary Grant, chairman of the DreamToys selection committee, said: “Due to Covid-19 restrictions across the country, retailers will simply not be able to service as many people in store due to social distancing. In addition, couriers are already overloaded and will struggle to meet the demand to get presents to people before Christmas. Added to this is the limited availability of stock compared to previous years; our advice is to shop early to avoid missing out.”

But with limited delivery capacity across the UK this year, Kelly Askew, Accenture’s managing director of strategy, has suggested that alternative ways for retailers to do business may need to be considered. As an example, Yodel partnered with private-hire taxi firms to deliver parcels at the early stages of lockdown. Other non-traditional delivery partners like Uber Eats and Deliveroo are also an option, though at an extra cost.

Click and collect services should also be a popular choice this year, given that delivery costs are expected to rise. If executed properly, click and collect offers a safe shopping experience with less cost involved for both consumers and retailers.

John Lewis Partnership has significantly increased its collection slots this year. By the end of October, the retailer will have 269 stores offering click and collect, with 57 of these offering drive-through collections. The retailer has also been expanding its click-and-collect network via third-party partners.

Whilst delivery costs are expected to rise in the run up to Christmas, delivery delays are also being anticipated, with some retailers reportedly scaling back for Black Friday on 27th November, to make sure all orders are fulfilled and warehouses not overwhelmed. But while Black Friday deliveries will arrive in time, there may well be delays to orders made in the week running up to Christmas.

“It’s the people who do a rash of panicked shopping on 22nd and 23rd December who have a real reason to be concerned. I would expect a lot of packages will arrive on the 27th,” added Kelly.

Retailers may therefore bring their last pre-Christmas delivery dates forward, in contrast to previous years when delivery dates have been pushed later and later. Ultimately, to avoid such obstacles, shopping early will be key for 2020.

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