Modern Retail

Getting ahead of the Golden Quarter

golden quarter

As predicted, the shortage of HGV drivers in the UK shows no signs of slowing down, as the shift towards online purchasing continues, with consumers in the UK now making 43% of all purchases online. Over half of European consumers now buy online at least once a fortnight and convenience is undisputedly a key factor for most. However, research conducted by Descartes* reveals that 68% have had an issue with delivery within the last three months and, as a result, 24% lost trust in the retailer.  

Since the beginning of the COVID-19 pandemic, the proportion of purchases made online has increased from an average of 32% to 43%, and is expected to remain at 41%, even after the impacts of the pandemic begin to decline. With the demand continuing to rise and the coming additional strain of Black Friday, Cyber Monday and Christmas shopping around the corner, logistics managers and retailers are growing increasingly concerned, as the ongoing driver shortage will undoubtedly pose major challenges in ensuring deliveries are made effectively and on time. So, how can end-to-end supply chains keep up with the demand and also meet continually evolving customer expectations?

Reducing driver turnover 

Driver shortages are a serious problem in the UK, so it is vital that logistics providers consider how driver turnover can be reduced. With an estimated shortage of 100,000 HGV drivers, many retailers are being compelled to offer significant wage increases and large sign-on incentives, in a desperate bid to secure more staff in an incredibly challenging market – so how can retailers effectively offset these increasing costs?

Driving commercially can be stressful and demanding, and drivers can often be left struggling to meet delivery assignments due to poor planning. It is imperative that operators aim to improve the productivity of their existing staff, by making delivery routes more efficient and effective for the driver without causing them undue stress. Route optimisation software automatically accesses all options and selects the best combination of routes and stops, in order to maximise delivery capacity and minimise excess miles. Using this technology will boost driver productivity and reduce miles driven; for larger organisations and retailers, this would help to retain their existing driver pool and work as an effective alternative to hiring dozens of additional drivers to meet the demand – especially when the number of potential driver recruits is at an all-time low.

Planning to withstand the pressure of the golden quarter 

Whilst the pandemic and Brexit has exacerbated the HGV driver shortage, there will be considerably more pressure as we approach the coming peak shopping periods. Bargain days are growing increasingly popular, as Black Friday and Cyber Monday continue to build in the UK. This, combined with the recurring strain of the increased demand over Christmas, could land a lot of retailers in situations that are extremely difficult to navigate without an effective plan set in place. Click and collect was more popular than ever last Christmas; Argos experienced a 24% uplift in click and collect orders in the week leading up to Christmas, whilst The Entertainer resorted to extending its order collection time until midday on Christmas Eve. For retailers to succeed and fulfil their customers’ evolving needs, they must ensure that they have established the correct infrastructure – those that will thrive in the golden quarter will need to be more operationally nimble than previous years, with supply chains, delivery operations and staff that are able to adjust with the ever-changing conditions.

Evolving customer expectations 

For e-commerce consumers, receiving a satisfactory delivery service is paramount. Customer expectations are continuing to evolve, and receiving packages at a time and place that is most convenient to them is considered an important part of a positive customer experience. If retailers wish to stay competitive and grow, they must meet these needs. Failure to implement the correct infrastructure may result in retailers suffering a loss of loyalty and receiving complaints from customers who consider their experience to have been negative as a result of poor logistics planning, which is an implication of inadequate delivery services that cannot be overlooked. In order to meet the needs of the customer and ensure a good reputation for the brand, it is necessary for logistics to be as efficient and streamlined as possible.

With dynamic delivery appointment scheduling, fleet operators can increase productivity through improving delivery density by offering customers incentivised delivery options at the point of sale. With certain slots that are closer to existing planned deliveries offered to the customer at a reduced cost, delivery routes can be optimised further, while the customer is still empowered to choose the slot that best fits their needs – whether that be the fastest, a chosen day, or even an ‘eco-friendly’ option. 

Conclusion

Even as the impacts of the COVID-19 pandemic begin to decline, the huge shortage of HGV drivers challenging the retail industry will take years to solve. The HGV driver shortage is already causing chaos for many retailers and with the infamous peak periods, or the golden quarter, just around the corner, things won’t get easier on their own. It is crucial that companies act now and implement tools to manage the increased demand. Whilst there is no denying the importance of sourcing new drivers to increase the pool of available staff, increasing the productivity of existing drivers is paramount. Advanced route optimisation has the potential to play a key role in combating the driver shortage during a time where the demand shows no signs of slowing down. Retailers wishing to thrive in the impending lucrative peak periods must plan ahead, or risk providing an inadequate service and losing loyal customers as a result. 

*Descartes’ survey was conducted among 5034 consumers in 9 markets comprising 5 regions: UK (1003), Germany (1005), France (1003), NORDICS (1020), Belgium and Netherlands (1003).  The interviews were conducted online by Sapio Research in July 2021 using an email invitation and an online survey. 

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Andrew Tavener

Andrew is Head of Marketing at Descartes Systems UK Ltd and has over twenty years’ business-to-business senior marketing management experience with high technology solutions (hardware, software and services) in complex business-to-business markets that includes logistics and transport with organisations such as Intel, Securicor, Unipart Technology Logistics and Orange.