Peak seasons vary by industry, but most commonly in retail, ‘peak season’ refers to the busy period in the weeks around Black Friday in November, and Christmas in December. The period now typically runs for the full two months and extends into January to account for post-Christmas returns.
This period has grown in the past few years and now affects businesses across the broad retail sector, logistics and beyond. Starting early to plan for the shopping event, is key to maximise success.
This blog will look into the lessons learnt from last year’s peak season, and how these shape peak season trends for 2024. We will cover:
Economic instability and the cost-of-living crisis have led consumers to be more cautious with their disposable income. A report stated that 74% of consumers have said they intend to adopt a more budget-conscious approach to peak-season shopping.
Alongside this, the upturn in consumers turning to marketplaces for their purchases displays the desire to maximise value for money. Marketplaces are expected to account for 45-50% of US ecommerce spend by 2025 and in 2023, 88% of consumers stated they planned to acquire their purchases from marketplaces. Their success lies in their ability to connect buyers to an exponential number of products, from across sellers in seconds, maximising shopper purchasing power. However, reports show that 48% of people are saving money to shop during Black Friday, and 70% plan to spend more this Black Friday than in 2023.
Consumers today are looking for added value, with expectations extending beyond discounts. Offering premium delivery features such as fast deliveries, reliable tracking services and flexible returns will generate value that consumers are willing to pay for; with 78% of digital natives stating they’re willing to pay extra for premium delivery services. This highlights the growing need for a seamless and dependable delivery experience.
In 2023, the expected return rate following peak season was approximately 15.4%, equating to approximately $148 billion worth of merchandise. Companies that ensure they are prepared for returns and have a seamless, efficient process in place, will reduce their costs and improve the customer experience.
Ensuring reliable deliveries for customers is more important than ever during peak season, as it can offer a key differentiator to companies. During the 2023 peak season, 42% of consumers experienced uncertainty associated with late or missing deliveries. This is concerning as one study found that 94% of consumers said they would blame the retailer directly, for any delivery problems experienced.
A continuing trend that has emerged over the past couple of years is the lengthening of peak season. Previously, spending trends have indicated the period was fragmented, peaking on Black Friday and then again a couple of weeks before Christmas. The period is now extending, starting from November 1st and continuing for the remainder of the year; £84.6 billion spent online between November 1st and November 27th in 2023.
Alongside this, spending on Cyber Monday in 2023 jumped by 9.6% compared to the previous year with approximately $38 billion worth of sales made in the US during the whole of Cyber Week, the five days following Black Friday.
Many retailers opted to extend their Black Friday sales, for example, Amazon doubled its Prime Day promotions and sales period from 5 to 10 days in 2023.
The extended period gives consumers more time to avoid out-of-stock frustrations and the need to pay for expedited shipping fees.
The omnichannel revolution is continuing to influence retail trends across the board. Ecommerce and other online sales such as social commerce, were massive drivers in overall peak season sales in 2023, which rose by 8.2% compared to the previous year. Social commerce, whereby the shopping journey is completed on platforms such as TikTok, Facebook and Instagram, more than doubled between 2020 and 2023, accounting for around 4.7% of total retail sales.
Consumers are continuing to shop in-store as well, so it is key that retailers consider how to offer a seamless, coherent experience across all channels, to delight their customers.
It is hard to open a blog or article without a mention of AI, but for good reason. Developments in technology integrating artificial intelligence are enabling greater efficiency, accuracy and innovation, across industries. For retail, AI enables personalised shopping experiences, improved inventory management and can streamline bottlenecked services such as customer service, through chatbots and virtual assistants; for example some reports say AI chatbots can save retailers over 5000 hours monthly. Having these technologies in place ahead of peak season can help to streamline processes during periods of increased demand, ensuring the customer experience excels even on the busiest day of the year.
Even during peak, customers still show interest in sustainability when selecting their purchases, this is particularly prominent among younger buyers. As concerns surrounding our environment grow and environmental legislation is put under the spotlight, ignoring sustainability during peak seasons is no longer an option.
Considering sustainability throughout the product journey, including delivery, is key to ensuring customers trust your sustainable proposition and are willing to pay for it.
Peak season is a critical time for retailers, and for some can make or break their financial year. By understanding the trends that will shape retail’s peak, businesses can effectively develop strategies to make the most of the opportunity.
The key peak season trends to watch in 2024 are:
By embracing these peak season trends and investing in the right technologies and processes, retailers can ensure that they are prepared to capitalise on the peak season and deliver a positive customer experience.
Looking for more? Read more here to discover how to prepare ahead of peak season.
