There is no doubt that December is a hectic time for online sellers. From supply chain logistics nightmares to structuring sales to get customers to visit your website, we all know what a challenge it can be. This holiday season has been complicated further by the pandemic, the supply chain and shipping crisis, and the labor shortage. Despite the difficulties encountered this year, we saw an increase in sales. December 2021 proved that e-commerce is still going strong and is continuing to improve every day.
The shipping crisis that has been in the news continually is impacting the international supply chain. As a result, shipping containers are unable to enter the country or are sitting in the ports for months before they are unloaded. In turn, this affects what is available on the shelves and how quickly things are able to be restocked.
Although that affects the supply chain, it doesn't necessarily impact the local small parcel delivery systems. Small parcel shipping is mainly affected by the labor shortage. As e-commerce grows, it becomes increasingly difficult to hire enough delivery workers to meet demand. As a result, the situation becomes more critical, or so we thought. According to a recent article from the New York Times, the vast majority of packages delivered by UPS, FedEx, and the USPS this holiday season arrived on time or with minimal delays (defined by a few hours and no more than a day late for ground shipments). The article continues to say“... The UPS and the Postal Service delivered about 99 percent of their packages on time by that measure between Nov. 14 and Dec. 11, and FedEx was close behind at 97 percent, according to ShipMatrix.”
While most delivery companies have experienced difficulties hiring seasonal drivers, it appears that things went well this holiday season with site managers stepping in to deliver when needed. Although the shipping crisis is not over, this residential and small parcel shipping success points to a brighter future!
Despite the large shift to online shopping, the retail industry might not be dead after all. Consumers more than ever are looking for their favorite e-commerce stores to also have brick-and-mortar stores. While we tend to overlook in-store retail in the e-commerce industry, taking a closer look may assist us in determining how much consumers are spending in-store versus what they would prefer to purchase online, and why it might be worth investing in both strategies.
The Wall Street Journal reports, “As the cost of acquiring customers online has skyrocketed, stores also are a less expensive way to attract new shoppers.” While there has been much discussion in the industry about whether e-commerce will supplant brick and mortar altogether, it is proving that the relationship between retail and online is connecting consumers. Unlike stores in the past, today's retailers are leaning towards alternatives such as smaller boutiques, pop-up shops, and even some stores without the ability to immediately take home physical products but which allow customers to see them in person, to then order online.
After large chains closed more than 6.573 stores in the last year, other companies such as TJ Maxx, Dollar Tree, and Dollar General are opening up stores. “Executives say customers like to shop in stores to see products before they buy them and get help from a human sales associate rather than a chatbot. Younger customers especially like the social aspect of shopping with their friends.” according to The Wall Street Journal.
Retail certainly does not look like it did in the past, but it has become more important to consumers and customer acquisition than ever before.
Typically, by the time we write this blog it is too early to review sales data from the month preceding but this time we are able to do so. If you watched closely during the Black Friday weekend sales, you might have noticed the decline in consumer spending in both retail and e-commerce over the previous year, which may have been a sign of how the rest of the season would unfold.
#ShipTip: If you want an exact number and analysis on that weekend, read our blog here.
According to Mastercard, compared to 2019 (pre-pandemic) and 2021 e-commerce gained an increase of 61.4% in sales. The same study also found that e-commerce gained holiday share up .4% year over year. In 2020 holiday retail e-commerce had a 20.6% market share and in 2021 there was 21%. “Shoppers were eager to secure their gifts ahead of the retail rush, with conversations surrounding supply chain and labor supply issues sending consumers online and to stores in droves,” said Steve Sadove, senior advisor for Mastercard and former CEO and Chairman of Saks Inc. in a release. “Consumers splurged throughout the season, with apparel and department stores experiencing strong growth as shoppers sought to put their best-dressed foot forward.”
In light of all the unknowns this holiday season, we are pleasantly surprised at how successful it was. The final holiday/quarterly sales numbers have not yet been released, but e-commerce continues to grow. It will be interesting to learn more about what happened during this holiday season in the months to come.