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4 Ways Covid Will Impact Last-mile Delivery This Holiday Season

Learn some of the key takeaways from the recent Accenture report on the impacts of last-mile shipping due to the COVID-19 pandemic, including increased eCommerce orders and higher expectations.
4 Ways Covid Will Impact Last-mile Delivery This Holiday Season
Jules

By Jules

 

November 19, 2020

Covid has impacted every part of the way we live. Graduation parties turned into drive-by parades of loved ones honking. Everyone’s got sourdough starter. Elbow bumps are the new hugs. The park is the coolest place to be. Everyone’s sporting the must-have accessory of a mask. And come this holiday season, shopping will be done from the couch, tea in-hand, rather than strolling through a mall, packed in there like sardines with strangers.

Last month, Accenture published a report on Covid and last-mile shipping. Below, we’ll summarize the report and provide you 4 key takeaways on how the pandemic will have an impact on this holiday season — including increased eCommerce orders, high customer expectations and fewer in-person stores.

Increased Online Orders

2020 is a lot of things. But, for our purposes, it might just be the year of online shopping. When the pandemic caused stay-at-home orders in March, our buying habits changed, leading to a surge in eCommerce orders to the tune of an 88% increase in the US and Canada, according to the Accenture report. To put it in concrete terms, online sales surged by $107 billion.

And with peak season, which typically begins around Thanksgiving, just around the corner, the trend continues. In a recent study, 43% of consumers said they will shop online this year for holiday gifts, opting out of the in-person experience entirely.

Reluctance to Visit Brick and Mortar Stores

The ongoing pandemic is still a very real concern around the world, with numbers surging and lockdowns reinstated throughout Europe. Out of caution and necessity, people are either unable to or fearful of visiting in-person, brick and mortar stores — even with the proper PPE.

While eCommerce has seen a surge that coincided with lock downs instated in the spring, the retail industry as a whole has not had it easy. This year alone, 26 retailers from around the world filed for bankruptcy.

As a whole, our buying habits have changed. Nearly half of respondents reported shopping less than in previous years — with 38% of people reporting fewer shopping sprees. And those that are shopping are doing so almost exclusively online. In a recent report, 61% of consumers cited their desire to keep in-person shopping to concern over the health and safety of essential workers. Even Black Friday, typically lauded as the start of the holiday season, is taking a hit with two-thirds of shoppers skipping out on the door-busting day — opting for cyber alternatives.

Higher Expectations from Customers

Despite the mitigating circumstances — like, for example, an ongoing pandemic and a consistent surge in orders — customers still expect perfect service.

Thanks to eCommerce giants like Amazon, shoppers have been accustomed to immediate fulfillment and rush, two-day shipping — at no additional charge.  Plus, as many as many as 65% of consumers say they research free shipping minimums before even adding items to their cart. Whether or not your business offers free or flat rate shipping can really eat in your bottom line, with nine out of 10 customers calling it a deciding factor for where they spend their dollars.

This thirst for instant gratification keeps expectations high and does not account for the unpredictable, like weather or warehousing issues. Slip-ups will not be taken lightly, with  56% of shoppers reporting that they will not be return shoppers if something goes wrong — even during COVID times.

Increased Pressure on Couriers

In the case of holiday shipping, it’s always better to plan for the worst and be surprised by the best. Everyone is pleasantly surprised when a package arrives several days early, but disappointed when it arrives late. No one knows that more than couriers.

That’s why, even under immense year-round pressure, they’re gearing up for the holiday season, too. To prepare for the combination of pandemic and holiday orders, the couriers made big hiring moves this fall that fall in line with their typical patterns. In September, FedEx announced plans to bring on 70,000 additional employees, as the courier expects an “unprecedented peak holiday shipping season.” UPS also announced plans to bring on 100,000 new employees for the season. Before that, the already-strained USPS added 39,000 additional employees for the April-June quarter to meet demands from the eCommerce boom related to the Coronavirus Pandemic.

But how will ends meet? The answer is fees, fees, fees! UPS and FedEx will be hitting big box companies with the hefty shipping fees that they’re usually exempt from. So while the Targets and Walmarts are hit with fees between $3 to $4 for shipments, the local businesses will be spared in hopes that they’ll survive what’s expected to be a rough road ahead.

Conclusion

The dramatic shifts in eCommerce and shipping will have a big impact on peak season and going into 2021. Merchants and consumers will need to be agile to adapt to these new realities. For merchants, the key is preparation and offering your customers flexible shipping solutions, so they can choose if they want the fastest or more affordable delivery. It will most likely be dependent on the circumstances, with no one solution meeting their needs. You can download the full report here.