What is peak season?
Some online retailers generate up to 50% of their sales during Peak season! This is a major business challenge for both retailers and carriers who provide them with delivery services. How do you define Peak season? Let’s find out below!
Definition of the peak season
The “peak period” or “peak season” is a time of year when retailers, and especially online retailers, experience a significant increase in sales. This is usually due to cultural events or major promotional offers organized by all players in the retail industry to boost their sales.
Retailers are not the only ones to be strongly impacted by the peak season, carriers are also at the forefront of this intensive period that can be tricky to manage. Indeed, they have to handle several millions of parcels every day, several times a month!
Highlights of the peak season
During 2 to 3 months, retailers and carriers must adjust to manage a significant increase in sales to be processed. November and December are the busiest months of the year, featuring recurring events, such as:
- Singles’ Day, celebrated in China on November 11. In opposition to Valentine’s Day, this day has become a huge commercial event in China, boosted by the Alibaba group and its subsidiary AliExpress in particular, with massive discounts on their products. According to Dealabs, Single Day generated nearly €97 billion of revenue in 2020 in China.
- Cyber Week, an intensive week of sales composed of:
- Thanksgiving, celebrated in the United States on the 4th Thursday of November.
- Black Friday: a huge day of sales on the day after Thanksgiving. This custom has spread throughout the world and reaches record sales. In the United States, shoppers spent nearly $9 billion in 2021, according to Adobe Analytics. Shoppers don’t stop spending on Friday, they continue throughout the weekend and peak the following Monday.
- Cyber Monday: is the continuity of Black Friday, with sales mainly online. These have surpassed the sales of Black Friday with over $10.7 billion spent during Cyber Monday 2021 in the United States.
- Christmas: Cyber Week sets the stage for Christmas present shopping. After this week of sales, shopping continues intensively until December 25. Many people buy their presents at the last minute, increasing the pressure on online retailers and carriers. The latter are challenged on service speed to deliver packages on time. One-day or two-day deliveries are very popular.
After Christmas, the peak period is over and carriers can catch their breath to resume their operations. New Year’s Eve and the January sales in France will also require their services. Some recurring events during the year may require intensive logistics from some carriers:
- Chinese New Year, at the beginning of the year
- Valentine’s Day (“lovers’ day”), on February 14.
- French Days (an event organized by 6 leading French online retailers as an alternative to the American Black Friday), in May.
- Amazon Prime Day, two days of sales for Amazon Prime members only.
- Summer sales in July and August, etc.
Each country has its own events that need to be planned.
The rise of online sales extends the peak season
Creating special events to boost sales is not a new concept. With fairs, events or in-store promotions, retailers already encouraged customers to go out of their way to get a good deal. Events like Black Friday, Christmas, sales or Valentine’s Day were created before Internet. They were therefore already busy moments for retailers and carriers. However, with households increasingly connected to the Internet, online sales have soared.
In France alone, e-commerce sales jumped from €57 billion in 2014 to nearly €130 billion in 2021 according to FEVAD, a tremendous growth of over 128% in 7 years! The COVID-19 health crisis was a real turning point for the logistics industry. Shoppers have become accustomed to the convenience and comfort of home shopping and delivery. With the sanitary restrictions, service sales have declined in favor of product sales, requiring more shipping needs. Given this success, the number of e-commerce websites has increased by 12% in 2021 compared to 2020, with an average of 27,000 new e-commerce websites per year, which means as many new potential customers for courier companies.
🚚 La Poste/Colissimo: between 100 and 120 million Colissimo parcels transported over November-December 2021 period
📦 Viapost: up to 45,000 parcels/day sorted (compared to 5,000 usually) to help Colissimo; 4 temporary platforms opened in France to cope with this increase in volume — 25% to 30% more parcels in 2020 compared to 2019.
🚚 GeoPost/DPDgroup: over 370 million packages delivered worldwide during the peak period, an 8.6% increase over 2020 — 9,000 additional delivery vehicles.
📦 Chronofresh: over 14,000 additional routes each day during the 2021 peak season — 22% more deliveries in 2021 compared to 2020.
🚚 GLS France: nearly 40% increase in volumes processed during the peak period — more than 40% of delivery vehicles deployed as backup.
Therefore, the peak period is an unusual time of the year that requires adapted logistics. The ability to manage huge amounts of parcels is a challenge that every shipper and carrier must meet. To do so, it is essential to be efficiently prepared and to anticipate any problem that may arise. For courier companies, the stakes are high because they are expected to be able to handle this busy season.