IMRG sees mild October pointing to bumper Black Friday

IMRG chairman Andrew Starkey was a leading light at the recent eDelivery Conference in Hammersmith and he warned the retail industry could be in for an even ‘peakier’ Peak than last year.

“Watch the weather,” Andrew (pictured) told the conference attendees. “If October is warm, dry and mild, which it has been so far, then retailers will have lots of winter stock to get rid of. This is likely to lead to retailers offering bigger Black Friday discounts which could ramp up demand even further for Black Friday.

“This shows how hard it is to forecast for such a volatile Peak. My advice is to keep an eye out for early wanting signs that the forecast is going to be way off. You must scenario plan and keep in touch with your carriers and 3PLs.”

The issue of logistics industry capacity also raised its head. Despite both Royal Mail and Amazon taking on 19,000 temporary workers each to cope with the peak, some speakers voiced concerns that fulfilment operations may struggle to cope. UKWA CEO Peter Ward said adding the pressures of free and sameday deliveries to ongoing problems regarding rates meant the industry was “moving towards a car crash”.

Taking a look at the bigger picture Peter explained: “We’re running into a huge problem in the UK and globally. Just project longer term to get a sense of the scale, look at demographics and increasingly feverish consumer behaviour.

“Global population is expected to be 9 billion in 20 years with 65% of people living in urban areas. In London we’re already seeing stiff competition for the tarmac. On warehousing, we’ve carried out research showing the recession-based slow down of speculative build means there is not enough warehousing space to satisfy demand. Property developers are rubbing their hands together as rents and yields are up. The real issue is the logistics industry increasingly cannot afford warehousing.”

Gary Winter, business development director, UTL added: “We cannot afford to run warehouses anything other than completely full. We want to be flexible but it is getting harder. For example, some clients are asking for 200,000 sq ft of warehousing on a rolling 12 month contract, but to service this we need to sign a 10 year lease. There is a need to balance risk and reward in the supply chain.”

Paula Gould, supply chain programme & training manager for luxury mobile phone manufacturer Vertu suggested consolidation might ease logistics woes.

“I look out of my window and there’s six lorries travelling down the road, this doesn’t look like under-capacity, perhaps there is is room to consolidate routes?”