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The ‘Perfect Storm’ of COVID, PEAK & BREXIT
“The talks are over” was the blunt statement from No. 10 as the Prime Minister warned Britain to prepare for no trade deal when the EU Transition Agreement comes to an end on the 31st of December. Unless things radically change, from the 1st of January the UK will trade with the EU on WTO terms.
But it might not be the end, the EU still want to talk but fishing rights and state aid for businesses are major sticking points that neither side wants to shift on. The French in particular want to carry on enjoying their freedom to plunder British waters and don’t seem to realise that, whilst the UK hasn’t said they can’t fish, the UK wants to set quotas rather than be dictated to by an EU they are no longer members of. State aid for businesses is an area dear to the EU who want a level playing field.
COVID, PEAK & BREXIT
Bobbie Ttooulis, Executive Director at GFS, warns that retailers are facing the perfect storm of COVID, PEAK & BREXIT and as a result, online sales, which had already been increasing around 20% year on year, suddenly rocketed to a 10-year high. Over the next few weeks, GFS will be sharing practical tips on what you must do to prepare for BREXIT – whether there is a last minute deal or not there are steps you must take if you’re going to trade with the EU next year.
We will also be holding a webinar with GFS on the 27th of Janary looking back at COVID, PEAK & BREXIT. You can sign up for the webinar here.
Retailers Facing Peak Upon Peak
The sudden and unexpected surge in demand as a result of COVID-19 left many retailers in a very precarious situation. New social distancing measures in warehouses meant that, overnight, businesses found themselves juggling peak-level order volumes with vastly reduced staff numbers. In addition, carriers were experiencing their own capacity issues, leading to unprecedented delays in the supply chain.
This meant that even some of the biggest household names were forced to stop taking online orders. Those that continued to trade had to advise customers that their orders may take up to 10 days or more to be delivered. Some businesses had to stop trading altogether.
Christmas is now only a matter of weeks away. The Brexit transition period ends less than a week later, and many predict the Covid-19 crisis has shifted consumer habits for good. This means the next couple of months could see the ‘perfect storm’ of covid, peak and Brexit for retailers.
With no certainty over what social distancing measures may still be in place, and capacity expected to be limited in warehouses – retailers must act now to ensure they have the flexibility, agility and correct contingency measures in place to weather the storm.
Beware of Changes and Limits to Carrier Services
Carriers are already warning that there will be limited capacity over Christmas this year. In planning for peak season, retailers will need to get their forecasts in as soon as possible to ensure that the carrier will be able to cater for them. Capacity is likely to be offered on a first-come-first-served basis, so any delay in getting forecasts to carriers risks them being unable to accommodate you.
In anticipation of increased demand, carriers are implementing their own contingency plans in order to protect their service levels. For example, it shouldn’t come as a surprise to find carriers switching off non-core services that may slow down the networks, for example, services for bulky, heavy items like furniture.
In addition, some carriers are already restricting or indeed turning away new customers to protect capacity. This means that retailers that have under-forecasted their capacity requirements will face difficulties accessing additional capacity, be it with their current carriers or new.
Don’t Put All Your Delivery Eggs in One Basket
Relying on one single carrier to fulfil all your orders is far too great a risk, as it means that if there are any issues, your parcels will have nowhere to go. This will result in delays and a backlog of unfulfilled orders, leading to unsatisfied customers and more time spent handling queries. Instead, to combat this, it is essential that businesses work with multiple carriers to give them contingency so that if one fails you have others to fall back on. But there are further advantages to having a multi-carrier approach. It means you can optimise your carrier mix to strike the right balance between service, performance and price to get the best for your business and your customer – a win, win.
Coupled with the right technology solution, retailers will have the ability to add or remove delivery options depending on capacity. This enables them to provide the range of services that customers want but have the ability to turn delivery options off with one carrier and switch to another should capacity become an issue.
When it comes to Brexit, retailers should also be sure to check the level of preparation the carrier has put in. Some will require data from you, such as SKU, EORI number and HS codes. Others may have failed to prepare at all. Read on here for further tips on ‘Brexit Proofing’ your deliveries.
Technology Solutions To Help Boost Post-Brexit Sales
No one knows exactly what will happen when border-free trade ends, but it is expected there will be significant changes to import/export duties. These are already one of the biggest challenge’s retailers face when entering international markets. Duty payments are important to customers too, with 68% of international consumers checking if there are any additional fees to pay.*
Retailers should therefore consider this factor as part of their technology solution. Including any duty payments at the outset will provide transparency over how much consumers are expected to pay. This would not only help encourage more sales, but also ensure speedier cross border deliveries.
Peak Sales means Peak Returns
Returns are already a real headache for many retailers, and cross-border returns present additional complexities. But they are a fact of peak season sales and are important to consumers, with 1 in 5 abandoning a purchase if they don’t like the returns policy.
Neglecting returns could prove to be very costly. Any delays in the returns process can mean potential sales are missed, further eroding margins. Retailers need to make sure their returns are handled swiftly, provide value for money and offer the same flexibility as deliveries.
Find out more about how you can prepare your supply chain post-brexit.
Watertight Contingency Planning for the Perfect Storm
With the coronavirus pandemic ongoing and online shopping at peak levels, retailers face a huge ‘peak on peak’ as Christmas approaches. For many businesses, this year has exposed the lack of contingency measures within their supply chain and the need for a robust multi-carrier approach. It’s important to plan and plan early, including getting forecasts in with carriers as soon as possible. However, it’s not just about planning, but also preparing for the unexpected with a flexible multi-carrier approach to delivery and returns. 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.
emigration to China is the only answer
were preparing the dinghy
Whos going to paddle, Farage ?
Housing price crash. Bring it on…..
They would rather set negative rates than let that happen. It’s quite clear. 2008 it was the people that took mortgages on 10 houses couldn’t afford even one that were bailed out, and they’ve now made a mint from the ridiculous long and low rates as well as house price increases, yet they were the most careless and irresponsible borrowers going.
More than just a storm coming, it’s a hurricane! The UK is seeing unprecedented demand for packaging, a key indicator of the increase in couriered goods. No one has a model or sound theory for predicting what is going to hit us over the next 2 months. It looks to be a peak with disruption on a big scale, the smart ones will be carefully planning and making sure they have multiple routes for both stock in and orders out.
And returns? I think many will be piling them up in a corner until mid January!