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The delivery system is broken. I repeat, the delivery system is broken….it’s the Friday Blog!

Published on: 12th December 2014

Now the data has been confirmed, it appears that Black Friday and Cyber Monday proved highly effective in driving online sales. Around £810m was spent on Black Friday, a whopping 50% more than had been anticipated. A further £660m was apparently spent on Cyber Monday. But there has been an unwelcome – yet somehow entirely predictable – side-effect to the surge in orders: delivery chaos. Indeed, one newspaper report referred to the whole delivery system as ‘broken.’ By all accounts, even the largest retailers have had to admit defeat and tear up their delivery promises. Yodel, the UK’s second biggest delivery company after Royal Mail, has publically admitted that it has stopped collecting parcels from retailers as it struggles to clear the backlog.

There have been tales of delivery delays of anything between 10 days and two weeks, while some consumers have even accused certain online retailers of ‘dirty tricks’. Here is one example: “I’d like to warn people about what Amazon are up to this year. Bought tons of Xmas presents which hadn’t been delivered and when I checked my Amazon account it turns out they had mysteriously been returned. Now if I want to buy again the prices have mysteriously gone up.” And another: “What’s the point of ordering anything from Argos when they clearly can’t fulfil their delivery obligations. There are websites packed full of disappointed Argos customers due to non-delivery and poor customer service.” And another: “How about you just deliver your paid for orders on time? As opposed to making me use two days of leave for nothing.” You get the picture.

The upshot could well be a short-term boost for bricks and mortar retailers: at least consumers know they will have the items they want before Christmas, rather than waiting nervously in the hope that their order arrives in time.  If that proves to be the case, the timing of last weekend’s Small Business Saturday couldn’t have been better: the event – designed to encourage consumers to shop at their local independent store – certainly received plenty of media coverage. Brighton-based toy shop Wigwam Toys was one of the 100 retailers invited to Downing Street to take part in a Christmas Fair to promote the event, which must have been a fascinating experience. You can read about their trip here.

Ultimately, I do find the breakdown of the delivery system slightly bizarre: having pulled out all the stops to drive huge sales volumes, it’s almost as if some retailers had no plan in place to cope with the fulfilment of the extra demand they’d created. If I didn’t know better, I’d say they didn’t think it through properly….

Tesco has been back in the news this week after it confirmed its full-year profits will be below market expectations. Shares fell by up to 16% after the announcement that its profits will not exceed £1.4bn, significantly below the expected range of £1.8-2.2bn. Furthermore, the four executives who ‘left’ Tesco after the profit overstatement fiasco have been told they have no right of appeal over their departures while the Serious Fraud Office investigation is taking place. It has been suggested that his decision, in turn, may prompt a legal challenge from some of the executives. All of which probably isn’t helping Tesco’s suppliers to feel any better about its short-term prospects.

Maybe that explains the bizarre ritual taking place at one of Tesco’s main competitors, which was reported by the Daily Mail thus: “On the first floor of Asda’s Leeds headquarters, staff gather around a desk for a spell of forced fun known as a ‘huddle’. Speeches recognising the contributions made by employees are delivered, games are played and there are loud whoops and cheering. Known as ‘Asda Magic’, staff are trained to reproduce a version of owner Walmart’s American schmaltz.” I can only imagine the embarrassment and rictus grins on the faces of the poor staff forced into participating in such a ridiculous charade. All that whooping and hollering may work in America, but somehow I doubt it translates to the UK mind-set. But I bet Ricky Gervais is taking notes, just in case he ever decides to bring The Office back….