Consumer and market trends

From warehouse to wish list: the journey of Black Friday Goods

Black Friday is one of the most significant shopping events in the world, with millions spent every year.

On November 16, 2023

While Black Friday offers retailers great opportunities, it also raises substantial logistics challenges. Let’s explore the optimal strategies to master the logistics required to handle this surge in demand.

Traditionally, Black Friday happens on the Friday after Thanksgiving in the United States. Retailers on this day offer substantial discounts and great deals. Originating in the United States, this tradition has evolved into a global phenomenon and marks the official start of the holiday retail season. It is followed by Cyber Monday, an extension of Black Friday sales when people continue shopping online after returning to work. This year, Black Friday falls on the 24^th of November.

While this shopping event used to be synonymous with long queues in stores, the pandemic marks a shift in consumer behaviour, with more people shopping online rather than in physical stores.

Black Friday, a critical time for retailers and the logistics industry

In 2022, consumers spent US$ 9.12 billion online during Black Friday, surpassing the record sales of $9.03 billion in 2020 (Adobe Analytics). While these record sales represent great opportunities for retailers, it raises major challenges in terms of logistics. During this busy time, retailers need to be highly prepared and flexible to avoid any supply chain management disruptions and provide optimal service to their customers.

“The challenges of Black Friday and Cyber Monday are intrinsically linked to customer expectations for a seamless, reliable, and satisfying shopping experience”, says Philipp Auerbach, Global Account Director Retail & e-Commerce. “Meeting these expectations is essential for maintaining brand reputation and customer loyalty.”

Retailers need to have an efficient and flexible logistics infrastructure, carefully plan their inventory level and secure their transportation resources. Managing all these challenges is critical as consumers have high expectations of their online shopping experience. They expect regular updates on the status of their delivery and will not tolerate delays or missed deliveries. A negative experience delivery can have a significant impact on customer loyalty.

What is the best plan of action to survive Black Friday?

With so many challenges, logistics managers need to adopt the right strategy if they want to survive such a sudden surge in demand.

Implementing a data-driven strategy to predict future demand: companies should invest in the right tools to collect accurate real-time data at every step of the supply chain. This data collection will allow them to better forecast demand, predict possible supply chain disruptions and adjust their logistics strategies accordingly.

Automating the logistics processes to enhance operational efficiency: implementing the right warehouse automated system allows companies to boost their operational efficiency and mitigate the risk of errors, a critical factor during high-stress periods like Black Friday. This encompasses the use of Order Management Systems (OMS), Automated Sorting and Picking Systems, Warehouse Management Systems (WMS), Demand Forecasting Tools, and Route Optimization Software, all of which can streamline processes and minimise the likelihood of mistakes.

Implementing an omnichannel supply chain* for a seamless order and preparation and delivery: during Black Friday, orders come from multiple sales channels, both online and offline. Companies with an efficient omnichannel supply chain are better positioned to master the complexity of this busy time. They will gain many benefits, including enhanced inventory management, higher flexibility in order fulfilment, improved operational efficiency and customer experience. “It is important to prioritise same-day or next-day shipping options to meet customer expectations for fast delivery”, says Philipp Auerbach. “Implementing a priority system for picking and processing is essential for Black Friday/Cyber Monday.”

Leveraging a flexible workforce: to cope with increased volumes, logistics companies need to hire extra temporary staff. Properly trained, these additional workers play a crucial role in ensuring the smooth execution of logistics operations during Black Friday and beyond.

Organising efficient last-mile delivery to ensure customer satisfaction: assuring a seamless and reliable customer experience right up to the doorstep of the customers is crucial. Philipp Auerbach emphasises the importance of strategic partnerships and proactive planning. According to him, “logisticians must seek partners with reliable and robust shipping offers. Additionally, having alternative delivery options for potential delays or disruptions is imperative to uphold service quality.”

General readiness for peak volumes: “Before peak periods, thorough preparation is key. Fulfilment operations must plan for sufficient and flexible capacities, optimise their warehouse organisation and prepare emergency measures in the event of unexpected problems. This ensures smooth picking and on-time shipping even when volumes skyrocket,” emphasises Philipp Auerbach.

As stated above, Black Friday demands careful planning, adaptability, and efficient execution. By fostering collaboration with 3PL service providers, retailers can navigate the challenges of this peak season and stay ahead of the competition.