Peak Season 2022 in Australia: Insights and Lessons Learned
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Despite their origins in the United States, Black Friday and Cyber Monday (BFCM) have become integral to Australia’s retail industry. Every year, retailers all over the country offer impressive discounts on a range of products and services, making it the perfect time for consumers to get their Christmas shopping done ahead of the holiday season.
Even amidst the soaring inflation, the success of BFCM sales reached new heights in 2022. Based on NAB’s transaction data, Australians spent more than an estimated amount of $7.1 billion across the four-day shopping event. With this in mind, our team has conducted a post-peak season review to find out the change in parcel volume growth and transit time during the most recent BFCM weekend in Australia. We have segmented our analysis into 2 time periods as follows:
Before BFCM: 31 Oct 2022 – 20 Nov 2022
BFCM: 21 Nov 2022 – 12 Dec 2022
Parcel Volumes in Australia Saw a Greater Surge During Peak Season 2022 Than 2021
As compared to the pre-BFCM period, Australia's parcel volumes increased by a whopping 45.1% during BFCM weekend in 2022, which is a way more significant growth than what was experienced last year (38.3%). In line with this observation, Jay Bonaretti, CEO of Amino Z, mentioned the following:
“The biggest learning (from peak season 2022) was how much traction Black Friday has now in Australia. This has gained a lot of momentum over the last few years. We also learned that our customers were holding out for Black Friday, rather than buying on the sales that launched early. Several of our competitors launched 1-2 weeks earlier than Black Friday, for example.”
Transit Times for Parcels in Australia Increased Notably Over the BFCM Period in 2022
The average time from the first (first-mile) event reflects the time to transport goods from a merchant's premises or warehouse to the next hub from which the goods are forwarded. It’s no secret that shipping carriers move significantly more packages during peak shopping seasons like Thanksgiving and BFCM. More often than not, those packages also tend to be bigger and bulkier than what these firms normally handle.
As such, it was not surprising to find that the average transit time for domestic packages in Australia increased from 2.87 days pre-BFCM to 3.35 days during BFCM 2022. When asked to use 3 words to describe how peak season 2022 went, Brendan Gillen, CEO of The E-Commerce Factory, said:
“Uncertainty, High expectations, Overloaded. The biggest learning we took was setting customers expectations early with the potential delays during the peak season (being BFCM), as we had seen the impact on the overloaded logistics network and uncertainty as to whether customers would receive their orders in time for Christmas.”
There Was a Bigger Rise in Carrier-Related Issues During Peak Season 2022 Than 2021
Delivery issues can generally be attributed to two groups of actors; on the recipients’ end (i.e. nobody being home to receive the package) or the carriers’ end (i.e. the lack of prompt delivery notifications to inform consumers about the parcel whereabouts). Knowing the root causes of delivery failures allow retailers to better manage expectations, thus helping to enhance the overall customer experience.
In the case of Australia, the proportion of carrier-related issues has been on the rise in recent years. During the 2022 BFCM weekend alone, carrier-related delivery issues accounted for 9.27% in the country, compared to 6.92% in 2021. Similarly for the pre-BFCM period, the number was notably lower in 2021 at 4.92% than the 9.27% we saw in 2022.
According to Christian McKelvie, the former Head of Marketplace at Catch.com.au, the logistics industry should prioritize addressing the issue of accurate and reliable tracking updates by carriers in 2023. He believes that “customers (today) want transparency both pre- and post- purchase, including accurate dispatch times, carrier information, and tracking information that is readily accessible to them.”
What Lies Ahead for Retail and E-Commerce in Australia?
Although customers' buying habits have shifted since the Covid-19 outbreak, post-pandemic trends suggest continued robust growth in the internet retail sector. There are no doubt some major economic challenges, including rising interest rates, which are having an impact on household expenditure. We look forward to what the future holds for Australia’s retail and e-commerce as the pace of online shopping growth begins to stabilize in months to come.
About eTail Australia
eTail Australia (Feb 14 - 16, 2023) is THE market leading annual meeting place for Australia’s top retail leaders. You'll learn from, network and collaborate with leading Founders, CEOs, CMOs, Heads of eCommerce and Digital Marketing Leaders (and more!) as they share practical insights to deliver, thrive and expand YOUR business.
Parcel Monitor is a media partner for eTail Australia 2023. Retailers can get 15% off tickets by quoting “PM15” at checkout.
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