Peak Season: Planning to Maximize the Online Shopping Experience

By Ramsey Mansour

We all know, from both a business and a personal perspective, that e-commerce has fundamentally changed retail – and there’s no going back. E-commerce is also rapidly altering customer expectations. More than ever, consumers are in the driver’s seat, demanding higher standards of service and support.

For virtually all retailers, peak season affects every stage of the value chain. The “final mile” of the delivery process is no different. Typically, retailers and delivery companies’ collective capacity is stretched to its limits during this time of year.

But while peak season can expose stress points, it’s also an opportunity to shine by driving an optimal customer experience. Planning for peak is more critical than ever before. With that in mind, I’d like to take this opportunity to share some key insights from our most recent peak season and offer you tips for planning a successful 2018 holiday season.

Before I focus on insights derived from the 2017 peak season, let’s look into the customer a little bit – or, as we at Purolator like to refer to them, the "Receiver".

The Changing Focus of Last-Mile Delivery

Before e-commerce, in a traditional B2B model, demand was fairly predictable, and delivery processes rarely changed. Timing and flow of volume were fairly well understood and generally held no surprises.

The typical receiver’s activity and behaviour, however, are markedly different from those of businesses. Today’s customers/receivers tend to be:

  • More spontaneous
  • More mobile
  • More demanding
  • More in need of flexibility
  • Driven by experience (and, thanks to social media, they're not afraid to share!)

Receiver Delivery Expectations Keep Rising

While shipping decisions are often established by you, the sender, the rules that ultimately define the delivery experience are firmly set by the receiver. This changes the playing field in a very significant way. Recipients are demanding, and their experience (positive or negative) is often dictated by:

  • Service flexibility (more services and delivery options)
  • Speed (time- and day-definite)
  • Convenience (including door-to-door and flexible delivery options)
  • Level of visibility (in real time)
  • On-time performance (keeping your promises)

Underlying this shift are changing consumer buying patterns – and customers increasingly expect that the seamless omni-channel purchasing experience extends to delivery and returns. Retailers have to create a sense of certainty with customers that their pickup and return processes will be fast and effortless. Achieving this promise during the busy holidays has big implications for all players – and their brands.

Demand for On-Time Performance

On-time performance is at the core of the receiver’s delivery experience. It requires setting the right expectations around the timing for delivery and providing status updates along the way. But, honestly, these are now the minimum requirements for a positive delivery experience.

The next level is consistency of service. By executing shipment after shipment with excellence, it stands to reason that you, the shipper, will experience a positive result during the consideration and purchase cycle. Your brand will be more admired and respected. You will create a more loyal customer. In this regard, on-time delivery is a key performance indicator for any online transaction.

Delivering consistently has operational and cost benefits too. Happy customers who receive their deliveries exactly when promised don’t tend to complain or tie up call centres.

Fast Is Getting Faster

Receivers are continuing to throttle up their expectations for delivery speed. According to research, only 42% consider three to four-day service fast. The vast majority (83%) expect their deliveries within two days.

But the day of delivery is just the starting point. We at Purolator are seeing greater demand for night, weekend and same-day e-commerce deliveries. Therefore, alongside the need for greater delivery speed is another emerging trend: a desire for greater flexibility.

Demand for Service Flexibility

Retailers in recent years have been trying all kinds of flexible delivery options, including in-store pickup, pickups scheduled for a later date, in-store holds on products purchased online, locker boxes and so on.

Purolator has initiated several pilot projects to address these changing needs for flexibility and convenience. When looking at current statistics, one thing becomes clear: there is still a lot of work to be done when it comes to finding the ideal solution for everyone.

With this in mind, perhaps a “one size fits all” approach won’t work in this new world. It’s becoming increasingly clear to me that in this day of smartphones, active lifestyles and the juggling of work and personal commitments, the receiver is always in motion. Keeping up with their expectations is part of the challenge of serving the growing market. Hence, the final-mile network may ultimately extend beyond the home – and become more dynamic and mobile.

Return to Sender

With e-commerce, customers demand more control over every aspect of their shopping experience, including delivery and returns, regardless of the platform or device. And as e-commerce volumes continue to grow, we’re seeing greater returns following peak.

A North American study supports the growing importance of returns:

  • 42% of shoppers look at a retailer’s return policy before buying
  • 40% would stop shopping online with a retailer if its returns were slow
  • 46% abandoned an online shopping cart because the retailer didn’t offer free return shipping

“Digital friction” – that is, how hard it is to purchase something online, have it delivered or returned – is the enemy of conversion and customer satisfaction. A proven process and a competitive, if not superior, return policy are absolute must-haves for today’s e-commerce retailers.

Planning for Peak Season: Trends, Insights and Recommendations

As the chart below illustrates, peak shipping rises and falls in fairly unpredictable ways. However, a few things become clear. There are seasonal peaks that occur throughout the year (for example, seasonal replenishments) – and then a significant ramp up before the holidays. These are quite observable for Purolator since we have both B2B and B2C volume in the mix.

A few things are worth noting when looking at holiday volumes:

  • There are a lot of peaks.
  • The peaks are peakier.
  • The peaks build up and continue to rise throughout the mid-point of the season.
  • The final peaks are wider.
  • Mondays are clearly where we see the biggest peaks.
  • There is a steady climb in demand until a week and a half before Black Friday, when customers start to hold back, anticipating sales and other promotions.

2017 Holiday Peak Insights

Naturally, understanding changing peak season activity is as important to our business as it is to retailers. Like you, we know that planning for peak is one pillar of success. This past holiday peak revealed some interesting trends that could help support our collective planning and decision-making processes:

  • Peak season is more spread out, arrives earlier and lasts longer than in the past.
  • Cyber Monday is morphing into Cyber Week, as both customers and retailers are shifting the demand of Boxing Week to well before Christmas.
  • There’s an additional peak in the last few days before the holidays, representing last-minute shoppers looking for shipping options to deliver gifts in time for the holidays.
  • Returns, as mentioned earlier, continue to escalate; how retailers deal with them provides a competitive opportunity and potential for added differentiation.
  • Purolator customers are beginning their planning well before the season arrives.

There’s also more to peak planning than forecasting volumes. Other factors include:

  • Understanding the various capabilities available to you – and how best to take advantage of them
  • Prioritizing technology integration to allow for a seamless digital experience
  • Operations coordination to maximize efficiency and service
  • Returns planning to enhance the overall customer experience

To meet – if not exceed – receivers’ rising expectations, the partnership between delivery companies and retailers is vital. When one of us succeeds, the other surely will too – whether during peak season or any other time of the year.

Here are a few takeaways I’d like to leave you with:

  • Understand the capabilities out there and how best to use them.
  • Take every opportunity to integrate technology.
  • Coordinate with sales and operations teams to optimize pickup and delivery processes.
  • Ensure returns augment the customer experience, not the other way around.

Together, we can truly fulfill every customer promise in an evolving omni-channel world. Even more important, by keeping a close eye on the latest trends, we can anticipate customers’ future demands. And if that isn’t a recipe for ongoing success, I don’t know what is!