With a
record breaking $6.43bn predicted to be
spent online in the US across the Thanksgiving period in the US, UK retailers
should ensure their supply chains can handle a spike in demand, says Venkata V,
Global Practice Head – Retail Solutions, IT services company ITC Infotech.
Black Friday
has long been established as a traditional sales bonanza in the US, and is
predicted to see $2.48 billion spent online this year, up by 28 per cent.
Meanwhile the more recent eCommerce follow up Cyber Monday is expected to
increase by 15 per cent to $2.6 billion, and Thanksgiving Day itself has been
predicted to see online sales of $1.35 billion, up 27 per cent.
The American
tradition has been an increasingly popular import in the UK, with leading
retailers including Amazon, Argos and John Lewis offering sales both online and
in-store. Amazon UK reported a record-breaking 4 million sales on Black Friday
last year, topped by 4.1 million on Cyber Monday, while Tesco and John Lewis
saw online sales jump by 114 per cent and 300 per cent respectively. Asda even
saw fights break out in-store as customers scrambled for discounted electrical
goods.
“UK
retailers are already bracing their logistics operations to handle the
Christmas rush, which can see as much as 70 per cent of yearly sales volumes
achieved in the last two weeks of December, says Venkata V, who works with some
of the top retailers around the globe.However,
with the US expecting one of the biggest sales periods in history this
Thanksgiving, the UK should be prepared to see a spike in demand and more
strain on their logistics. Even retailers not offering specific Black Friday
discounts themselves can expect more demand as shoppers are inspired to hunt
for Christmas bargains.”
The rapid
escalation in demand created by sales events like Black Friday can be extremely
lucrative, but also cause havoc on unprepared supply chains, as demonstrated by
China’s recent “Single’s Day” event. The country’s biggest sales event saw the
e-commerce leader Alibaba rake in sales of over £9 billion, but the day has
previously slowed down delivery times from two days to over a week.
Saravana
Kumar who heads Supply Chain consulting in ITC Infotech says “Marketing,
production and logistics teams should work closely together to make sure their
operation can handle increased demand on the 28th of November,
especially as they are likely to already be stretched by the Christmas period.
Flexible retailers have a strong opportunity to capitalise on the sales event
by reacting to demand and adjusting their pricing strategy on the fly,
increasing and lowering prices as needed.The
increased complexity of omni-channel retail has made the supply chain more
challenging, also presents an opportunity for well-prepared operations.
Capacity should be available to quickly move stock for the most popular
products around to meet increased demand online or in particular stores.”
He
concludes: “While Black Friday will always be a US-centric sales event, UK
retailers should be prepared to capitalise on the waves it is beginning to make
over here. With logistics operations pushed ahead of December sales, nothing
should be left to chance.”
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