3 minute read • published in partnership with SCCG
Insight: Black Friday weekend & the supply chain
Famously known all around the globe, in the UK, in just a weeks’ time, consumers will once again partake in two of the year’s major annual sales events – Black Friday and Cyber Monday.
The Supply Chain Consulting Group explores the established retail event and the impact it has on the supply chain.
Originally from the US, what was once known as a unique, one-day event, with customers queueing hours before the retail stores would open, Black Friday has since evolved into a weekend-long digital extravaganza, that runs from Friday 29th November 2019, until Monday 2nd December 2019 – when Cyber Monday starts – just in time for some Christmas shopping.
This year, Black Friday is set to be another promising consumer event; which in previous years has included keen participation from retailers including Amazon, Argos and John Lewis; offering both online and in-store sales and savings.
This Black Friday, with shoppers purchasing across multiple channels – the worldwide logistics are stocking-up, securing distribution network capacity, and carefully preparing their warehouses for the predetermined retail-rush.
Statistics show that consumer enthusiasm for Black Friday shopping has increased by 8% in 2019, and spending is predicted to rise overall by 4%, as both online and high-street shops will offer discounts on a variety of products, including food and cosmetics.
However, the biggest sales will be on electronics, such as TVs, computers and virtual assistants (e.g. Amazon Alexa) and even phones, with even more extravagant sales promotions, offered throughout Cyber Monday!
Growing from what was initially, a one-day sales event to now a whole weekend, logistics and supply chain companies now know to plan-ahead, to be fully prepared for the onslaught of the Black Friday, and consecutive, Cyber Monday, sales saga.
Best practice dictates that if a DC requires any system upgrades and performance improvements, these are planned to be completed in advance of the commencement of any sales. Supply chains improve their warehouse management systems (WMS) before November and optimise their Distribution Centre (DC) and networks.
All of this preparation is necessary in order to keep-up with and ahead of the fine balance of supply and demand; Keeping stores’ shelves stocked-up during the sales, whilst also reducing the need for costly storage inventory.
There is an estimation that retailers spend the majority of the year planning for Black Friday and Cyber Monday – usually lucrative events, achieving sales worth circa £10.5bn across the week.
During Black Friday season, recruiting temporary staff within distribution centres and warehouses is a familiar practice. Delivery faults or failures could potentially damage a company’s brand image or affect customers advocacy; both of which retailers wish to avoid at all costs. Two prime examples, Amazon and Royal Mail, each hire close to 20,000 staff, before the Black Friday deals begin.
For consumers, the convenience of online shopping opens a window of opportunity for retailers, as they can offer unique, one-time promotions. However, the possibility of returning the unnecessary products is now an important factor that consumers consider before making a purchase.
Due to the increased number of sales made during the Black Friday Weekend, companies may notice a high volume of products being returned.
Throughout January, this impacts upon Reverse Logistics – as usually, a high volume of products end up being returned, as consumers look to exchange or return the products they received as gifts or surplus impulse purchases made on Black Friday or Cyber Monday shopping events.
Returns go far beyond consumers simply taking their items back to the shop where they bought them from; and can encompass anything from product retrieval, scanning, liquidation or disposal, and are at peak after Black Friday, Cyber Monday, and of course, Christmas. Therefore, reverse logistics are essential in supply chains – especially during Black Friday. Thus, a way that supply chains handle this issue is by outsourcing Third Party Logistics companies (3PLs) to handle their reverse logistics for them.
Black Friday is, doubtless one of the busiest times of the year for logistics, supply chain companies and retailers around the world, but, with serious planning and anticipation, this season can lead to higher volume of sales and a great business success.