Black Friday - Different today than it once was for the transportation Industry.
Black Friday – not the 1896 stock market catastrophe, the Black Friday we love as consumers!?
Black Friday is a time consumers look to do the majority of their Christmas shopping in North America. ?
Some say the term was coined in Philadelphia in the 1960s by police dealing with crowds of shoppers. Most retailers would argue the terms was developed from an accounting standpoint as Black refers to stores moving from ‘Red’ numbers to ‘Black’ for profitability. ?
Rachael shared in her guest article majority of retailers will generate 25-50% of their revenue from November through to December. One thing is for sure, Black Friday is traditionally an economic stimulus for North America.?
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Black Friday and Transportation ‘Peaks’?
Traditionally, the weeks before Black Friday signified when transportation providers would see volumes spike to meet the upcoming demand of shoppers (and retailers servicing these shoppers). This had been called Peak Season, and for decades, ocean, intermodal, over the road, and final mile carriers where able to charge a peak surcharge during this time. Supply and Demand would drive rates as capacity could not keep up with these peak volumes.?
This traditional model for peak season held from 1960 to 2018-2020. In these years customers lined up at stores before the sun rose to be ready to shop and take advantage of substantial discounts. It meant that middle mile carriers dealt with increases in volume from retailers DC-DC, Ports of inbound freight to DCs. The LTL shippers also had volume increases as they took retailers freight from DCs to the stores. In many cases, carriers would have trailers full of product staged and ready at there DC’s to meet the demands.?
While exactly when the shift took place is up for debate, (2018 is the recognized boom for on-line shopping) , with changes in technology and internet access in the last decade, on-line shopping has become the dominant way to shop.?Not long after establishing social commonality, the pandemic catapulted on-line shopping even further in front as consumers could not shop at stores at all during restrictions and lock downs. ??
Retailers continued to offer in-store sales on Black Friday; they just did not see the same frenzies they had experienced in past. Now days, many large retailers offer Black Friday sales throughout the month of November to try to eliminate the line ups on one big day. As a result, peak season in transportation has changed. ?
See below from an excerpt from a recent adobe blog ; ?
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Retailers, shoppers and experts alike had a hard time predicting exactly how the biggest shopping day of the year would go [in recent years]. While most retailers remained closed on Thanksgiving Day as they did in 2020, there were some unique outcomes of the 2021 Cyber Week, resulting from supply chain issues and inflation. Not only were cart totals higher: up 13.9% from 2020 (a result of larger purchases and higher prices), discounts were weaker: for example, electronics were -12% vs -27% in 2020 and there were more out-of-stock messages than ever before +258% compared to Nov. 2019?
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2018 - 2022 Historical Black Friday - Cyber Monday Revenue from Adobe ; ???
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In 2020 all previous records were smashed, consumers started shopping earlier, many consumers, numbers would indicate the majority waited until Cyber week. Price points may have been higher due to pandemic inflation; however, discounts were also increased. ??
The changes in consumer shopping habits have had a significant effect on transportation providers, and peak season has shifted. Now, the weight of peak season is lengthier and much more heavily placed on parcel and final mile delivery services.?
When on-line shopping started gaining momentum, shippers and transportation companies were not fully ready for the volumes. The internet was full of stories from consumers who shipments did not make it for Christmas or at all. Visibility to the consumer was challenging for many providers, and volumes and demand grew so quickly the national small parcel companies’ systems overloaded and failed in many cases.?
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Good transportation companies are always adapting, carriers and brokers adopted technology, embraced the new process consumers were using to purchase. Transportation companies understood after 2018 & 2019 they needed to improve visibility, delivery methods to consumers, on-time delivery to consumers. Improved planning with shippers supplying retailers as well as retail customers. We have all seen the improvements our industry has provided to shippers and consumers since 2018. ?
This year it is anticipated by Forbes that 130 million will shop on Black Friday, 71 million on Cyber Monday, 32 million on Thanksgiving Day. It will represent 19% of all retail sales for 2023. ?(See - Black Friday 2023 Sales Predictions forbes.com )?
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This is all positive news for the economy which needs a boost IMO. Transportation companies that work with retailers, provide final mile small parcel service providers should see increased volumes in the last quarter. We have seen a 24% increase in volumes already at Wellington Parcel Services.?
Excited for the deals, aren't we? ?? As Benjamin Franklin once said, "Beware of little expenses; a small leak will sink a great ship." Let's navigate these sales wisely! ?? #SmartShopping #QuoteOfTheDay #BenjaminFranklin