Now that we’re in the heat of summer, retailers are gearing up for the chillier months of peak season to face a familiar challenge: meeting ever-rising consumer expectations for fast, affordable delivery.
The peak season window has been steadily expanding, with sales events and promotions starting as early as late October. This prolonged period of heightened demand puts a significant strain on retailers’ supply chains and delivery networks.
Gone are the days of a single tentpole event like Black Friday driving the majority of peak season sales. Consumers have grown accustomed to a calendar of rolling promotions that blend seamlessly from fall through winter as retailers look to pull more volume earlier to avoid delivery bottlenecks closer to the holidays.
This extended peak puts pressure on retailers to ensure they have sufficient delivery capacity and optionality to meet customer expectations. Retailers can’t afford to have just one egg in their delivery basket. Shoppers expect to be able to purchase any item online and have it delivered on their own timeline, putting those without agile fulfillment operations at risk of losing sales to competitors. Last year was the busiest yet, as the National Retail Federation reported a record $964.4 billion in holiday sales.
While pandemic disruptions upended supply chains and delivery expectations, steady e-commerce growth has the industry returning to a level of normalcy. According to the International Trade Administration, e-commerce in the U.S. is growing at a compound annual growth rate of 11.22%, and the global marketplace is expected to reach $5.5 trillion by 2027. Now that the market has steadied, there are new opportunities for retailers to provide exceptional customer experiences so they can win in this competitive landscape.
What Consumers are Feeling
While economic headwinds like inflation persist, consumer spending remains resilient heading into peak season. In May, consumer confidence rose for the first time in four months. Shoppers have adapted by becoming more selective and value-conscious, prioritizing convenience and speed over simply choosing the lowest price option.
This dynamic has accelerated the demand for expanded e-commerce selections and fast fulfillment. The ability to browse a retailer’s full inventory online and receive purchases quickly via same-day delivery is now table stakes. Our recent study found 66% of businesses reported higher conversion rates after rolling out same-day delivery, with 23% seeing improvements between 6-10%.
Consumers have also shown an increased willingness to pay more for guaranteed fast delivery, particularly for bulky or harder-to-transport items. One report showed that 33% of consumers were willing to pay $10 or more for shipping last holiday season.
Meeting the High Bar
As consumers have embraced e-commerce and come to expect fast, affordable delivery, major retailers like Amazon and Walmart have doubled down on their logistics capabilities. Their immense resources allow them to offer nationwide same-day shipping at scales that make it challenging for smaller competitors to match.
However, failing to provide similar delivery speed and convenience is no longer an option in 2024. Consumer preferences have been permanently reshaped — speed and optionality are now significant factors in purchasing decisions.
In this environment, handling bulky or oversized items with fast, cost-effective fulfillment has emerged as a key point of differentiation. The ability to deliver these larger items on time and safely increases profitability and provides a better customer experience. Crowdsourced delivery networks built for same-day, last-mile logistics offer retailers a flexible, scalable solution to meet this need without massive capital overheads.
Rather than a few concentrated weeks, the 2024 peak period will see elevated order volumes across multiple months. Retailers require delivery networks that can flex up and down rapidly in response to fluctuating demand.
What Retailers Should Do
To win in this hyper-competitive landscape, retailers should prioritize investments and strategies around delivery capabilities, a diversified carrier mix and excellent visibility and experience for consumers.
Having the right technologies, carrier partnerships and delivery models can enable reliable same-day fulfillment at scale to meet peak season demands. Restricting operations to any single delivery provider leaves retailers vulnerable to disruptions. Convenience is paramount, so retailers must obsess over providing seamless post-purchase experiences. Real-time order tracking and transparent communication are essential.
By partnering with providers that can stitch together affordable delivery capabilities tailored to each retailer’s unique needs, companies can position themselves to capture market share this peak season and beyond. Retailers who are going it alone and lacking delivery speed and optionality will be left behind by increasingly convenience-obsessed consumers.
The coming months will put unprecedented strain on supply chains as consumer demands around speed and convenience converge with prolonged peak volumes. The retailers prepared to flex delivery capacity while maintaining affordable economics will be well-positioned to capture market share. Those still struggling to provide basic capabilities risk losing out in a big way. The logistics operations and delivery experiences retailers can provide to customers will decide which side of that divide they fall on.
