Truck and Track Winter 2024/25 www.truckandtrack.com 18 DESCARTES™ Peak season 2023 was challenging for UK retailers. Cost of living concerns dented consumer confidence, whilst global supply chain problems led to delays and cost increases for retailers. While these issues lie outside the control of any business, continued inefficiency in last mile delivery undermined both customer experience and profitability. According to the latest Home Delivery Consumer Sentiment Study 2024, two thirds (67%) of consumers experienced a problem with a delivery in the three month period surveyed. With 63% of those consumers responding by taking some form of action against the retailer or delivery company, or both, how are retailers gearing up for peak season 2024? Supply chain and economic uncertainty is inevitable, affecting not only customer experience and profit margins but also key strategic objectives such as environmental commitments. The onus is on retailers to control the controllables and eradicate uncertainty from the consumer fulfilment process, especially at peak season, explains Andrew Tavener, Head of Marketing, Descartes. No Second Chances As the third largest market for eCommerce, UK retailers should be leading the way with highly efficient fulfilment processes and an optimised consumer experience. With an expected increase of 7.3% in 2024, the market continues to boom and ecommerce increasingly dominates retail revenue. Yet the last mile fulfilment processes continue to disappoint, especially with the timeliness of delivery: 22% of consumers report a delivery came much later than promised and 21% at a different time. Ensuring a consistent, timely delivery experience becomes even more difficult during times of peaks in demand. Adding resources to manage the peaks is expensive and will rapidly eradicate margin during times of low utilisation. Alternatively, companies can opt to resource for the normal or average run rate and try to buy-in delivery capacity for managing peaks. Yet with workforce shortages affecting three quarters (74%) of companies, over-resourcing or scaling up on demand is easier said than done. Furthermore, when customers’ perceptions are seriously influenced by the quality of the delivery, can retailers really afford to rely on third-party temporary resources, especially given the significant contribution to revenue provided by peak season sales? The majority (63%) of those experiencing a delivery problem respond by taking an action that has an impact on both reputation and bottom line: almost a quarter (23%) of consumers say they lost trust in the delivery company and 19% would not order from that retailer again. There is no second chance: when two thirds of customers are regularly experiencing a delivery problem, and one fifth are lost to the business, the cost of fulfilment uncertainty is extremely significant. Levelling Out Demand Retailers cannot afford to make delivery promises they cannot meet – and that challenge becomes even more telling at peak season. How much does it cost the retailer when a discounted Black Friday offer is delivered to the wrong address or damaged? What are the implications for the bottom line when Christmas orders finally arrive in January and are immediately returned? Taking the Uncertainty out of Peak Season Andrew Tavener, Head of Marketing, Descartes
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