The cost of living crisis is very real and it’s not going away. Even if prices for our utilities are capped at £2,500 the reality is that food inflation is very real and a lot of consumer markets are starting to feel the pinch. Retail performance has been considerably more repressed in Q3 than anticipated, with even John Lewis seeing a downturn in terms of profits.
How does this impact on couriers?
Same Day courier companies are notoriously the barometer of UK industry. Chauffeur driving consignments from A to B tends to become very much less important when people are watching the pennies. So you will see a diversification away from A to B deliveries and onto consolidated services such as a multi carrier solution.
If you’re a delivery service provider whether it’s for one of the major carriers or for Amazon you may notice a decrease in terms of vehicles required and consignments out for delivery. Ultimately speaking much of the stuff that’s delivered in terms of eCommerce is not essential and people are trying to peel back. Non essential purchases will be decreased.
Diversifying is the solution for couriers
Therefore to sustain your revenues you need to diversify. That may seem insane at a time whereby everybody’s battening down the hatches. So why do we say invest? Because at Diamond, we have 30 years experience and 4 recessions under our belt. Every time there’s been a recession Diamond has come out of it very well.
Why is that?
Let’s look at eCommerce fulfilment for example. eCommerce fulfilment means the company can outsource its warehousing and logistics to a flexible partner. When companies are going through a cost rationalisation process they look to remove any expensive facilities they do not need. And a warehouse full of people for their diminishing sales is first on their To Do List. We are seeing a massive increase in terms of eCommerce clients.
Also we have a lot of different services. If people are really keeping an eye on the pennies maybe they want to shift the delivery service from same day to overnight? Maybe they want to move from a 24 hour to a 48 hour delivery? Maybe they want to look at different packaging options? We have an ability to do all of that for our customers and that flexibility in service delivery is incredibly important when people are keeping an eye on cost.
We continued to sell. Despite the fact that our average client value has dropped from £1,200 to £900 we’re still seeing consistent and persistent volumes. There are two reasons for this.
- Firstly, the kind of client that tends to use Diamond tends to be more professional, good marketing and client/business base. (Which is why they make prudent decisions such as outsourcing their logistics!) Whilst their revenues are reduced, they have not ceased. Our great Diamond Network Partner’s don’t stop selling, in fact they sell harder. So whilst we have got less revenue per client head we’ve got a lot more clients than we had this time last year. We are still growing.
- At Diamond, we have such a vast variety of clients from every sector imaginable that it is improbable that all the sectors will be hit by the impacts of a recession at once. We have a balance between medical, sports and leisure, general retail, engineering, manufacturing, defence, the NHS and government contracts – some of which were deemed to be safe havens in times of economic insecurity.
That’s four key elements – people want to outsource to us when they need to keep an eye on costs, we have a diverse service and client range to suit all budgets, our clients tend to be fairly resilient, we keep selling and growing.
Recession is looming and if you wish to maintain sustainable revenues, it’s important for you to diversify too. If you cannot guarantee that your delivery service revenue will be sufficient to keep you and your loved ones in the manner to which you become accustomed, maybe it’s time to diversify with a Diamond Network Partnership.
If you would like to find out more about the Network Partnership, contact our team at npsales@diamondlogistics.co.uk.
If you would like to speak to us about this, our team can be contacted on 0333 567 5888. Alternatively, email us at sales@diamondlogistics.co.uk or complete our contact form below.
