Insights

COVID-19, Peak Season & Brexit: How can retailers navigate this 'Perfect Storm'

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At the beginning of the year, eCommerce businesses were hyper-focused on Brexit preparations and how the end of the transition period would affect operations... And then COVID-19 hit! We asked our partners, GFS, to share their thoughts on the current situation and how is best to approach this ‘perfect storm’...

Following the Brexit mania, the outbreak of Coronavirus began to impact the world on a widespread scale, and lockdowns left customers relying on eCommerce at a rate retailers hadn’t seen before outside of peak. Online sales, which had already been increasing 20%YOY, rocketed to a 10 year high, and retailers were dealing with peak level sales. For SME’s, Covid19 was a challenge like never before, as many businesses needed to adapt quickly, to increase their online presence and find new ways to reach customers. All in all, 2020 has been a challenging year, and Brexit, peak season, and the continuing pandemic are set to keep the challenges coming.

Peak Upon Peak: Unprecedented Peak Season Ahead

The unexpected surge caused by Covid19 left many retailers struggling to cope. Overnight, businesses were balancing high order volumes, supply chain disruptions, social distancing rules and reduced staff numbers. Carriers also experienced capacity issues due to the increase in demand, meaning that even if retailers could get products out the door, some deliveries were delayed or even unable to be fulfilled. Some of the biggest household names, with well-established online stores, were forced to limit orders or close altogether, and many had to manage customer expectation over longer delivery lead times.

Although businesses have quickly adapted and learnt to manage this surge in online orders over the year, online shopping hasn’t shown any signs of slowing and retailers are now looking ahead to Christmas and expecting peak on peak sales. With the Brexit transition period less than a week after Christmas, retailers are facing a perfect storm that could present new challenges to retailers’ ability to perform business as usual.

With no certainty just yet over what social distancing measures will still be needed, and particularly as the UK has now been placed under a second lockdown, capacity is expected to be a challenge in warehouses and for carriers. Retailers must ensure they have the flexibility and agility to adapt and have contingency measures in place to weather the storm.

The Limits of Carrier Capacity in 2020

Carriers became overwhelmed by demand when COVID-19 first hit, and have been dealing with high delivery volumes all year. So, it’s no wonder that in the face of Christmas peak, carriers are already warning there will be limited capacity. When planning for peak season, retailers must ensure that their forecasts are with carriers as soon as possible. Capacity is likely to be offered on a first come first served basis, so any delay means carriers may not be able to accommodate the orders, even carriers retailers usually work with.

They also anticipate that they may end up turning away new business to protect their services. This means that retailers who find themselves needing to accommodate increased delivery demand could find carriers not willing to take them on. Similarly, businesses with existing carrier contracts may be unable to increase their deliveries if demand is higher than they anticipated. Carriers also may protect their own service levels by switching off non-core services that may slow down their networks, like two man delivery for bulkier items.

Don’t Put All Your Delivery Eggs in One Basket

Relying on one single carrier to fulfil all your orders this coming peak season is a big risk. If there are any issues or increased demand, your parcels may be left with nowhere to go, leading to delays and a backlog of unfulfilled orders. All of this could mean unhappy customers, especially if presents don’t arrive in time for Christmas, and leaves the retailers spending more time handling queries. To ensure this doesn’t happen, businesses must work with multiple carriers to make sure they have something to fall back on if one lets them down. It also means that you can optimise your carrier mix and strike the right balance between service, performance and price to get the best for your business and your customer.

Coupled with the right technology solution, retailers will easily be able to switch between carriers, turn off certain services and have full visibility over their entire supply chain to ensure everything goes smoothly. Visualsoft work with a number of multi carrier partners such as GFS, whose technology easily integrates with the Visualsoft platform.

Technology Solutions To Tackle Brexit Changes

Brexit will be adding an extra layer of complication to online sales come 1st January. No one knows for certain what will happen when borderless trade ends, but we do know there will be new customs rules to comply to. With customs and duties already one of retailers biggest barriers for international sales, Brexit looks set to further complicate the issue. Duty payments are important to customers too, with 68% of international consumers checking if there are any additional fees to pay. Retailers should ensure they have considered how to ‘Brexit Proof’ their delivery. This includes having the right technology in place to handle duties and taxes, and ensure they can accommodate new data requirements such as SKU, EORI and HS codes. For SME’s using Visualsoft, ensuring that your technology mix integrates fully with the platform ensures that being Brexit ready is a simple and easy process.

Peak Sales means Peak Returns

Following the end of the transition period on 1st January, January 2nd is known as ‘Returns Day’ as customers return unwanted presents from the Christmas period. Returns are already a headache for retailers, and cross border returns means further complexities. But a simple returns process is important for consumers, with 1 in 5 abandoning a purchase if they don’t like the returns policy. Delays in the returns process can mean resaleable goods being held up, further eroding business margins. Retailers must make sure their deliveries are handled swiftly, with great customer experience. This means having the technology and contingency so that come January, returns can remain smooth and uncomplicated even in the face of Brexit.

Contingency Planning To Prepare for the Coming Storm

With the mix of COVID-19 already causing peak level selling and peak season well underway, retailers face peak on peak as Christmas approaches. For many SME’s, this year has exposed the lack of contingency measures within their supply chain and left them struggling to cope with sale levels, new processes and reduced staff. The need for a multi carrier approach and robust technology solutions to ensure they can adapt whatever happens is more important than ever. It is important for SME’s to plan effectively, and plan early. Get forecasts in with carriers as soon as possible, and adapt your supply chain so that you are ready to take on whatever the year throws at you. In times of great uncertainty, such as peak selling and possible rule changes coming in after Brexit, the ability to adapt fast is the backbone to a successful peak period and challenging times ahead.


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