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Q&A: increasing efficiencies and processes for peak season

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By Published On: October 25, 20230 Comments

We sat down with David Boyer, Auctane VP & General Manager for APAC to find out how the fulfilment industry has prepared, and what retailers can expect over the coming months, as well as his tips for peak season success. 

We delve into what consumers expect for the 2023 Peak Season, equipping you to craft a strong e-commerce strategy for growth from October through Black Friday, Christmas, and beyond.

Late deliveries and packages arriving when recipients aren’t present is a primary concern along with high shipping costs for many consumers during the Peak Season.

Drawing insights from data encompassing 8,000 consumers and over 2,000 merchants across eight key markets, discover how to align with the larger context and fulfil online shoppers’ requirements.

With discretionary spending on a downward slope, how can retailers predict their peak season demand? Is this year gearing up to be much different from prior years?

The last few years have been difficult for Australian consumers, retailers and carriers – everybody feels the squeeze as we head into the final stretch of 2023. That said, there is resilience and purchase intent as we head into next year, with cautious consumers shifting their spending behaviour.

There is an air of quiet optimism that order volumes will surpass expectations – and a reason why Australia Post is looking to hire 3,000 additional workers, as almost half of Australian consumers (48%) look set to do the majority of their shopping online. In particular, this year, Australians are set to spend $4.8 billion on online marketplaces (e.g. eBay, Amazon) as they shop around for the best value items in the lead-up to Christmas, even amid this cautious economic backdrop.

Although it is challenging to predict peak season demand, there is a clear trend towards marketplace shopping this year that savvy retailers can leverage to excel during peak season.

What are the biggest challenges for ecommerce businesses approaching peak season?

As the holiday season approaches, retailers face the challenge of balancing sales and profits, with shoppers beginning their holiday shopping earlier to seek deals. Mega-sale events like Black Friday can tempt businesses to offer steep discounts and prioritise free delivery, potentially affecting profit margins due to rising costs.

Adapting to economic changes and shifting consumer preferences is another challenge. Delivery cost remains a consistent concern year-round, but during the peak season, it’s equally important as speed, with 69% of Australians expecting deliveries in 4 days. Digital natives (Millennials and Gen Z) prioritise speed and convenience and are willing to pay extra for premium delivery services.

Customer expectations during the peak season are high, requiring fast, on-time delivery, status updates, preferred delivery locations, and easy returns. Balancing marketplace and website sales while meeting these expectations and reducing operational costs is crucial – especially as carriers raise their fees by 10-15%. In a peak season predicted to be unremarkable, a poor delivery or e-commerce experience can have a significant impact.

How can retailers overcome these challenges and implement new processes in time for peak season?

To meet the evolving challenges in online retail, it is important to offer an array of delivery options tailored to customers’ unique needs – this encompasses affordable shipping, expedited services, and convenient pickup locations, striking a balance between cost and speed. This approach safeguards profits and meets the rising customer expectations during peak seasons, enhancing the shopping experience.
As order volumes surge, retailers must establish efficient infrastructure to handle the increased load. With a growing reliance on delivery services, carriers are under increasing pressure to deliver promptly. Retailers should diversify their carrier partnerships to reduce the risk of disruption.

Consumer demand for varied delivery options and faster service is rising across Australia. Retailers should consider integrating with multiple carriers to prevent customers from seeking alternative retailers who can provide them with desired delivery options in cities and rural areas.

During peak seasons, clear and consistent communication is paramount. Customers expect transparency and timely responses. In the current economic landscape, where consumers are discerning and fickle, adopting a customer-centric approach with targeted communication is essential to maintain competitiveness and adapt to evolving shopping behaviours.

In ShipStation’s Peak Season Report, it was found that the impetus to shop early and benefit from promotions over the holiday season is particularly pronounced among younger shoppers. How can ecommerce retailers capture that older demographic that hasn’t quite jumped onto the trend and cater to them heading into peak season?

Across all markets surveyed, 44% of digital natives (consumers under 45) intend to engage in festive shopping during promotional periods like Black Friday and Cyber Monday. But conversely, older shoppers (baby-boomers 1946-1964) surveyed report being more likely to adopt more traditional approaches to manage budgets for their festive purchases. These include self-imposed spending limits, trading down to value brands and using cash to help them stick to their budget.

Baby-boomers are the most price-conscious – seeking competitive prices (53%) and wishing to compare products and prices (46%). We found that convenience and easy returns, however, were of lower importance than younger shoppers. Interestingly, 30% of baby boomer online shoppers sought the ability to shop from more than one brand on the same platform – highlighting the opportunity to target them on marketplaces.

All groups surveyed are starting their holiday shopping earlier this year as they look to stretch budgets, with 35% of Australian consumers surveyed stating they are planning to start before October.

To find out more about what to expect this Peak season, download ShipStation’s full report here: Peak Season Report 2023

Sources: https://www.shipstation.com/au/australians-48bn-online-spend-peak-season/

About the Author: Rosalea Catterson

Rosalea is the Editor of Power Retail. With a keen interest in consumer behaviour and tech, she covers everything ecommerce and hosts the Power Retail Power Talks Podcast.

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