Peak season: what is it and how has it evolved over the years?
Traditionally, the Christmas period and months approaching is the time of year, when our eCommerce, transport, haulage, fulfilment, and traditional retail logistics clients might earn most of their revenue. It’s a hectic and hopefully lucrative time for them. Since the COVID years, it’s become harder and harder to forecast consistent outcomes or volumes.
2023 peak was underwhelming for many. Thankfully for Mobile PPL, we remained robust, even slightly outperforming the trend, while many of our competitors appeared to have contracted.
Our MD, Matthew Marriott, remarks,
“The 2023 peak was just as unpredictable as the previous few years have been. Although our numbers were still okay, there has undoubtedly been a contraction from the UK’s major manufacturers, retailers, and distributors, as well as a general push to cut costs.
Feedback from our partners and friends across the country seems to echo our view, with volatility creeping across their client base. According to their input, the bigger retailers, wholesalers, and manufacturers have experienced a decline, while the smaller, more agile e-commerce businesses appear to be doing better as they quickly adapt to new trends in social selling. That is evident in the expansion of internet marketplaces like Etsy, Vinted, and TikTok marketplace which encourage and entice people to impulse purchases or find more unique gifts.
Fortunately, Mobile PPL is in a great position with our diverse client base, which reduces our exposure to any one sector. Whether its large blue chips working in full load and pallet network haulage or in the UK SME, e-commerce, and logistics market, we can pivot quickly to our clients needs.”
As an independent transport and logistics business, what we have noticed in the peak is the phenomenon of shifting consumer purchasing patterns. In particular we have noticed the condensing of the e-commerce retail peak to align more closely with Black Friday. This presents a compelling narrative within the retail sector. Traditionally, the onset of the Christmas shopping season would begin as early as September or October, marked by a gradual increase in consumer spending. However, recent trends suggest a significant shift, with the peak seemingly delayed until the release of Black Friday offers in November. This shift raises pertinent questions about consumer behaviour, retail strategies, and the broader implications for the e-commerce industry.
The Black Friday Catalyst
Black Friday has long been a pivotal event in the retail calendar, historically associated with brick-and-mortar stores but now equally significant in the e-commerce domain. The allure of substantial discounts and one-off deals has increasingly led consumers to delay their purchases in anticipation of this period. The phenomenon suggests a strategic waiting game where consumers hold off on buying even essential items in the hope of securing better deals.
Consumer Behaviour Insights
This shift towards a condensed peak shopping period can be attributed to several key factors influencing consumer behaviour:
Increased Savviness: Today’s consumers are more deal-savvy, armed with tools and platforms that allow them to compare prices, track deal histories, and anticipate Black Friday offerings.
Economic Considerations: In times of economic uncertainty or when disposable incomes are squeezed, consumers are more likely to defer spending in anticipation of discounts, making Black Friday an even more enticing event.
Marketing and Hype: Retailers have amplified the significance of Black Friday through extensive marketing campaigns, extending beyond a single day to encompass weeks of promotions, thus heightening consumer anticipation. This appears to work even when the deals are not as good as they seem.
Impact on Retail Strategies
Retailers, in response to these shifting consumer patterns, have adapted their strategies significantly.
Extended Promotion Periods: Many retailers now launch their Black Friday deals well ahead of the actual date, sometimes as early as the beginning of November, in an attempt to capture early bird shoppers and smooth out demand.
Personalised Marketing: Leveraging data analytics, retailers are becoming more sophisticated in their marketing efforts, targeting consumers with personalised deals to entice early purchases.
Inventory Management: The condensed peak has forced retailers to reassess their inventory management strategies, ensuring their fulfilment and logistics partners can meet the surge in demand without overstocking.
The condensing of the e-commerce peak has broader implications for the retail ecosystem.
Supply Chain Pressures: The concentrated period of high demand puts additional stress on supply chains, necessitating more robust transport, logistics, and fulfilment strategies to avoid bottlenecks.
Competitive Dynamics: The intensified focus on a narrow window of time heightens competition among retailers, potentially squeezing margins as businesses vie for consumer attention with increasingly aggressive discounts.
Consumer Expectation Management: Retailers must navigate the delicate balance between fueling anticipation for Black Friday deals and managing consumer expectations regarding discounts, product availability, and delivery times.
The apparent shift in the retail peak towards the Black Friday period reflects a complex interplay of consumer behaviour, economic factors, and retail strategies. While this condensation presents opportunities for retailers to capitalise on heightened consumer intent to purchase, it also poses challenges related to the wider supply chain, transport & logistics management, competitive differentiation, and customer satisfaction. As the retail landscape continues to evolve, understanding and adapting to these shifting patterns will be crucial for sustained success in the e-commerce and supplychain logistics domain.