Entering into February, some major retailers had already started to make plans for Christmas. After considering all the lessons learnt from the past festive season, companies were looking to improve their supply chain process model in time for December.
The countdown to Christmas
According to a IMRG report, UK consumers spent more than £100 billion online for the first time in 2014, and online sales were expected to climb a further 12% in 2015. It’s vital that retailers are able to cope with big increases in demand.
UK retailers have also added new trends from across the pond to the more traditional seasonal supply chain challenges. During recent years, the UK has adopted retail events based around the US Thanksgiving holiday, which is celebrated on the fourth Thursday in November. This means that huge flash sales and pricing wars are brought into the Christmas countdown, further driving consumer demand.
Black Friday follows Thanksgiving Day in the US and marks the start of the Christmas shopping season for many, as retailers extend shopping hours and offer promotional prices. In contrast, Cyber Monday embodies the growing popularity of e-commerce, as retailers tempt shoppers to spend in massive online sales. As both retail events grow bigger in the UK, retailers must ensure that supply chain processes can handle the increased workload.
One million parcels in one night
As the online retail boom continues in full force, delivery services are an increasingly important supply chain process in the retail industry. In the run up to Christmas, many consumers leave their shopping until the very last minute, and retailers can compete in an overcrowded market by offering the most flexible and convenient deliveries.
Courier company Hermes shared some statistics with Retail Week on its impressive Christmas performance. During December 2014, the company processed more than a million parcels in one night on nine separate occasions, and processed 6.9 million parcels in the space of a single week.
During the Thanksgiving weekend, Hermes handled 3.7 million parcels, a 49% increase on the previous year’s figures. Throughout the peak period for festive deliveries (from the last week of November to the end of December) the company processed a grand total of 24.4 million parcels, representing a year-on-year rise of 15% which exceeded the average industry growth of 11.6%.
Achieving customer satisfaction
Hermes attributes its supply chain process improvement to a fully automated flagship distribution centre in Warrington. This £14 million investment opened in May 2014 and has a capacity of 550,000 parcels a day, and an automated scanner with the capacity to process 20,000 parcels per hour.
So now we know the importance of supply chain technology within the delivery sector. But what about processes much further up in the retail supply chain?
In order to improve any supply chain process in the retail industry, brands need to have visibility over their suppliers. By monitoring the movement of products through the supply chain, a retailer can identify the cause of any delay and its repercussions on other processes. As a result, it can gain better control over garment production, leading to better control over high volumes of deliveries to stores and consumers.
Segura’s supply chain technology allows retailers to track orders placed within a framework of pre-approved suppliers. Real-time information can be accessed directly through our cloud-based platform, and automated alerts and email notifications keep retailers up to date with their delivery deadlines and critical paths.
Originally Published 04/02/2015
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