Yodel has spoken of the game-changing effect Black Friday and Cyber Monday 2014 had on its business, when it was called on to deliver 40% more parcels than at the same time last year. It says retailers and carriers alike must now learn lessons ahead of Christmas 2015, including the need to move away from next-day delivery promises at times of peak demand.
The parcel carrier, which works with 85% of the UK leading retailers, hit the headlines ahead of Christmas when it suspended pick-ups from collection centres for two days in the face of high volumes of parcels. Today it has released figures for the Christmas shopping period showing that it delivered 15.5m parcels between December 1 and 24, 11% more than at the same time last year. But its peak delivery day, December 1, saw deliveries climb by 40% compared to the same time last year, with more than 1.2m parcels delivered during the course of the day. Today’s figures also show how the carrier accepted more than 600,000 more than previously agreed with retailers over the Black Friday weekend.
The rise in parcel volumes in December is in line with figures from the latest IMRG MetaPack UK Delivery Index which shows that in December, parcel numbers were 11.6% ahead of last December, as forecast. But the delivery problems started when demand spiked 40% ahead of last year, over the course of Black Friday alone.
Yodel said noone had accurately predicted the true scale of Christmas shopping over that weekend. Experian and IMRG together predicted online spending would hit £555m over the course of Black Friday, but on the day, £810m was spent – 46% more than expected. Cyber Monday also exceeded original forecasts, with £720m spent online and beating prior estimates of £650m by 10%.
The IMRG has since described demand over the Black Friday weekend as a ‘retail tsunami’. In the latest IMRG MetaPack UK Delivery Index, out this week, the organisation’s head of e-logistics, Andrew Starkey, said: “The concentration of demand over the super sales weekend caused a spike in orders on top of already record volumes for the Christmas shopping period. Some retailers could not pick and pack orders fast enough and the change in the demand pattern temporarily overwhelmed some collection and sortation operations. However, after a short disruption in service levels the industry responded heroically and brought Christmas in on time.”
Yodel says retailers’ marketing promotions, together with a mild winter, meant shoppers waited before they both bought presents and invested in winter clothing. Flash sales triggered what Yodel describes as “a huge and unprecedented spike in parcel volumes” coming into its network.
Dick Stead, executive chairman of Yodel, said: “The Black Friday phenomenon, which overtook Cyber Monday as the peak online shopping day for the first time, has changed the Christmas peak model, possibly forever, as consumers are changing their online shopping habits, condensing them into a shorter time period.
Yodel said its well-publicised decision to defer some collections from clients for two days came while it processed the extra flash sale parcels and also took on parcel deliveries from other “challenged” carriers.
“We control the number of parcels coming into our network by agreement with the etailer and through managing the number of collection vehicles we send to each of our clients,” said Stead.
“Over the Black Friday weekend the number of parcels on the incoming trailers increased dramatically, over and above forecasted levels. We agreed to process the additional 600,000 parcels to help our clients and ensure their shoppers received their purchases as soon as possible.
“We did this on the understanding that parcel volumes would start to tail off after the sales. When they failed to decline as predicted, we took the bold but necessary move to defer some collections, which allowed us to recover and process all of the parcels within 48 hours.
“By Christmas Eve we had not only delivered on our promises but also successfully delivered an additional 388,000 parcels, which were not due until after Christmas, ahead of schedule.”
Yodel set out how planning for the peak delivery period started in January 2014, with a detailed Christmas operations plan. Ahead of peak, it recruited 5,000 more staff, added 700 extra vehicles and 13 extra sites to handle the increase in parcel volume. But the company says there is much for the industry to learn ahead of 2015, including a move away from next-day delivery promises at times of peak demand.
“We know there are many lessons to be learnt by the retail and carrier industries for Christmas 2015,” said Stead. “The model of next-day delivery as standard for all orders simply has to change when volumes unexpectedly increase to such an extent, in a capacity constrained business.
“We have seen that the majority of retailers are unable to accurately forecast future demand. The carrier industry cannot be expected to take all the risk, investing in building networks that are capable of handling unspecified peaks.
“Working together, we need to find a method of spreading volatile parcel volumes to match the industry capacity, while delivering a high quality service that meets everyone’s requirements. That may mean that 48 and 72 hour services become the standard during peak periods, and where required, next day deliveries are available for a premium.
“We’d like to thank our dedicated team for their efforts this year and rising to the new demanding challenges of an ever evolving and growing online shopping era.”
• Meanwhile, Amazon says its Amazon Logistics platform has helped it grow its Sunday deliveries by more than four times in the last year. Amazon Prime members can have their parcels delivered on Sunday at no additional charge.
The retailer says the growth in Sunday deliveries comes in large part as a result of the Amazon Logistics platform, which local, regional and national delivery companies use in order to deliver parcels from 13 delivery and sortation stations across the UK, ranging in size from 20,00 sq ft to 160,000 sq ft. Sunday December 21 was the busiest Sunday of 2014 for deliveries.
“We’re excited that so many customers are taking advantage of Sunday delivery and that so many local and regional delivery companies continue to join the Amazon Logistics platform,” said Jamie Stephenson, UK director for Amazon Logistics.
SAB Couriers, based in Watford, Hertfordshire is one of the delivery companies working with Amazon Logsitics. “Expanding our business with Amazon Logistics has been mutually beneficial,” said Maria Bebb, Director of SAB Couriers. “We can share our logistics expertise to deliver great customer service and Amazon provides us with state-of-the-art technology, such as handheld devices, software and GPS delivery routes – which benefits our drivers and increases our revenue.
“We’ve been working with Amazon Logistics since it launched in 2012, when we employed just three drivers and today we work with more than 40 delivery drivers – our relationship with Amazon has played a big part in our company growth and future stability.”
Amazon customers can also receive orders by collection from more than 16,000 Amazon Pickup Locations, including more than 10,500 Post Office branches and stores in the Collect+ network, Pass My Parcel stores, and Amazon Lockers. Deliveries made to Amazon pickup locations have more than tripled in the last year.
