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Retailers raise stakes for Black Friday, will the last mile prove the real gamble? by Evan Puzey, Chief Marketing Officer, Kewill

Black Friday and Cyber Monday have become a firm date in the diaries of consumers. The week from the last Friday of November (right after Thanksgiving in the U.S.) is now the time to celebrate all things commercial in the most fitting way – by shopping up a storm online and hopefully taking advantage of some deep discounts.

With peak-season trading the most important indicator of a retailer’s overall annual performance, Cyber Week (shorthand for the offer period) is beginning to eclipse the traditional January sales as THE key promotional driver to ensure sales volumes. Retailers no longer dare to wait for the outcome of holiday shopping figures before slashing prices – the sales now happen at the end of November/early December as internet savvy shoppers search down the best deals.

In the days before digital, news reports in late December would chronicle the hardened sales shoppers who would camp out all night to be the first through the doors of well-known department stores on the first day of the sales. Now, consumers sign up for updates from their favourite retailers and keenly note which products giants like Amazon are offering at a discount on which day, making their own comparisons on factors like shipping costs and delivery times, all of which figure large in the purchasing decision.

Amazon of course, who pioneered the concept, has been promoting its own event for months. Shop Direct, the UK’s leading multi-brand online retailer, saw its 2013 Black Friday event drive its biggest ever sales day, generating three orders per second via its Very.co.uk website alone during the busiest hour, and has committed to a major TV and press advertising campaign kicking off 48 hours in advance of this year’s event.

You can be sure that retailers’ Cyber Week plans are the culmination of tense negotiations with suppliers to secure the lowest possible prices in order to be able to offer the best possible discount, and that suppliers have contributed generously in many cases to meeting the bill for the associated promotional activity. But securing stock of popular items at an agreeable price is only half of the battle, as is ensuring that order systems can cope with the extreme demand. The real success –or otherwise – is in a retailers’ ability to fulfil orders and meet or exceed the consumers’ expectations.

When large discounts are offered, it stands to reason that margins are tighter than usual, and the difference between shifting large volumes at a modest profit and making a loss often very small. So ensuring that fulfilment costs don’t wipe out the profit and that a tight control is kept is more important than ever. This of course means making sure that the right combination of carrier and service is selected and strictly adhered to, but at a more basic level, ensuring that returns and order cancellations (when goods have already been shipped) are minimised, and the best way of doing that is to be absolutely clear with consumers when and how they will receive their goods.

This starts with providing an accurate delivery timescale at point of order, prior to payment details being taking, and keeping them informed if anything changes. It’s not ideal when an order is delayed, but often a simple automated email letting the consumer know when they will receive their goods is enough to stop them from cancelling the order and reordering elsewhere, or just going to their local store and buying the goods there at a higher price but with no waiting around for a delivery. And where returns are made, it’s imperative that retailers’ processes guide customers to return goods in the most economical way (e.g. via a local store) and that documentation is clear and user-friendly.

Of course, achieving this is only possible with the right supporting technology, with flexible, scalable supply chain management solutions that provide visibility over goods from order to delivery and where necessary, back to the warehouse, whether goods are dispatched from the retailer’s own distribution centres or directly from their suppliers. Cyber week is set to be bigger and better than ever this year and sales will no doubt put those of previous years in the shade. Retailers who have fully evaluated the last mile and ensured their supply chains are up to the challenge will reap the rewards. Others may be celebrating the holiday season with less of a fanfare.

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