Welcome to our latest eCommerce and logistics news roundup!
As summer wanes and we slide into fall, we’re starting to get more data that verifies we’re in the middle of an eCommerce boom driven by the coronavirus pandemic. The second half of the year will answer some big questions.
Will eCommerce continue to rise or have we hit the peak for 2020? When will shoppers return to in-store purchasing? How will retailers adapt? And perhaps most importantly, how will the current economic challenges impact the holiday shopping season?
On top of it, we’re heading into a very intense part of the US election season where we’re sure to have continued surprises that could directly impact the economy. Will there be another economic stimulus bill in time to send a jolt into the holiday season?
So many questions, and few answers just yet. In this roundup, we’ll take a look at some of the interesting numbers coming out about the eCommerce boom, Amazon’s new requirements for Seller Fulfilled Prime and some of the takeaways from the ongoing USPS crisis.
And, in case you missed our last logistics roundup, you can still read it by heading over here.
Data Confirms the eCommerce Coronavirus Boom
There’s been some interesting data coming out about the rise in eCommerce so far this year. The US Census Bureau reports that “ecommerce retail sales for the second quarter of 2020 rose to $211.5 billion, up 31.8% from the first quarter and 44.5% from the same period last year.” And according to data from Salesforce’s Shopping Index, global revenue from online sales increased 71% year-over-year in the second quarter of 2020.
The boom is real, and has greatly accelerated existing trends.
“According to new data from IBM’s U.S. Retail Index, the pandemic has accelerated the shift away from physical stores to digital shopping by roughly five years. Department stores, as a result, are seeing significant declines. In the first quarter of 2020, department store sales and those from other “non-essential” retailers declined by 25%. This grew to a 75% decline in the second quarter. The report indicates that department stores are expected to decline by over 60% for the full year. Meanwhile, e-commerce is projected to grow by nearly 20% in 2020.- Techcrunch
Now the big question remains if this acceleration is temporary due to the pandemic or if these trends will be sustained once brick and mortar stores open up again. The holiday season will be a real test for merchants and retailers, and according to Reuters the largest players like Target, Best Buy and Kohl’s are preparing for a shipping crunch due to increased eCommerce demand.
"We know that online shopping picks up over the holidays and the system is already pressed to meet that sort of demand," said Mark Mathews, vice president of research at the NRF. "If you've got a situation where you're adding another 10 or 20% to that, which is well within the realm of a possibility, that creates real challenges." - Fearing shipping crunch, retailers set earliest-ever holiday sale plans
Easyship Analysis: The key for merchants going into the holiday season is planning and looking for new ways to take advantage of the increased demand. CNBC spoke to eCommerce experts to get some insights on what sellers can do going into the holiday season.
“To succeed in e-commerce, you need to have the right assortment, then make things easy to find, purchase and get delivered. This is the genius of Amazon. But there are definitely opportunities to make online shopping more ‘fun’. Livestreaming is one. AR (augmented reality) and other means of enhancing utility is another,” Michelle Whelan, CEO of commerce agency Geometry U.K., told CNBC via email. - CNBC
Earlier in the year, we took a look at how merchants can take advantage of augmented reality to engage their customers. It won’t be appropriate for every seller out there but the holidays might be a good time to experiment. But first, you need to take care of the fundamentals, and that includes preparing for returns.
We just released a new guide on ‘Managing eCommerce Returns’ which can help merchants transform returns from a problem into a marketing advantage. We’ll have more resources in the coming weeks around the holiday season, so be sure to follow us on Twitter, Facebook and LinkedIn for updates.
Amazon Adds New Delivery Requirements for Seller Fulfilled Prime
Amazon announced some new changes that could have a big impact on delivery for small sellers. Sellers will need to meet specific delivery requirements, including offering weekend delivery if they want to retain the Prime label next to their products. As Bloomberg reported, this may be an effort to shift sellers away from the program, and into Amazon’s in-house fulfillment network.
At the same time, according to CNBC, “Amazon shipped 415 million packages in July, topping its three-month average between April and June.”
“Amazon is such a huge player in the e-commerce space, they have to manage their delivery themselves to handle the increased demand for online orders, especially during the pandemic,” said Satish Jindel, founder of ShipMatrix.
“They will continue to deliver more of their own packages, potentially reaching 80% of their own packages by next year. It means UPS and the [U.S. Postal Service] will be looking for more business to replace the Amazon business,” he said. - CNBC
Easyship Analysis: Amazon consistently optimizes their services for maximum efficiency and market share, so these latest moves are not surprising. But, there are still options for smaller sellers. Easyship is an FBA (2-day Prime) compatible service, so small sellers can continue to offer Prime shipping with third party providers like Easyship. We have no minimums shipping requirements and can support sellers during.
The Ongoing USPS Story
USPS postmaster general Louis DeJoy testified to the US Senate on the recent operational changes that have caused controversy around disruptions in service and possible challenges in supporting mail in voting for the November presidential election. CNN has six top takeaways from the testimony, with Dejoy admitting that there have indeed been service impacts.
"We all feel bad about what the dip in our service level has been," DeJoy told GOP Sen. Rob Portman of Ohio. DeJoy later told Homeland Security Chairman Ron Johnson that "a substantial portion" of the delays were due to the Covid-19 pandemic, while saying the USPS was working "feverishly" to erase the slowdowns.
"The only change that I made, ma'am, was the trucks leave on time. Theoretically, everyone should have gotten their mail faster," DeJoy told Democratic Sen. Jacky Rosen of Nevada, while acknowledging that hasn't been the case.
While DeJoy said he was suspending operations changes until after the election, he added he was not reversing the removal of sorting machines that lawmakers have raised concerns about.
"There's no intention to do that. They're not needed, sir," he told Michigan Sen. Gary Peters, the panel's top Democrat. - CNN
Easyship Analysis: It seems that this story has slowed down in recent weeks but with two months left before the election, the USPS is sure to stay in the headlines. For merchants, as always it’s important to provide your customers with delivery options and transparency around potential delays. We’re constantly updating our COVID-19 resources page so merchants can stay on top of any service disruptions and delays from couriers.
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