July 2021 E-commerce Wrap Up

We are officially over halfway through 2021, and as the world stumbles through a pandemic recovery, e-commerce sales continue to rise. This month, we review the latest industry news and the resumed trend of investing in e-commerce infrastructure to deal with continued growth. From new payment methods from Facebook to Walmart's innovated order management tech, exciting e-commerce developments were announced in July: 

Facebook Pay Comes to Shopify

Facebook Pay is making its way to other online shopping platforms, starting with the e-commerce platform Shopify. Customers in the United States will be able to use the payment method to purchase goods beginning in August. Business Standard details that the change will assist businesses in providing their customers with a seamless checkout experience on their websites. Following the expansion, Facebook Pay will be available for transactions at participating retailers. It will appear alongside other payment options such as Google's stored cards, PayPal integrations, Amazon Pay, and so on.

Users currently utilize Facebook Pay to send money, shop, donate, and more across Facebook apps and services, as well as WhatsApp and Instagram. In June, Facebook added QR code support to its payments platform, allowing users to send money to people who are not in their friends' group. Facebook says the move will help companies drive conversion by giving customers a low-friction and mobile-friendly way of paying online. 

UPS Looks to Begin Same-day Delivery

Business Insider recently reported that UPS is considering offering same-day delivery to compete with Amazon and FedEx. Because its warehouses are designed to sort and move packages rather than stockpile inventory (like Amazon's), the company faces logistical challenges. If UPS does enter the space, it appears that an acquisition or an outside partnership is very likely. Things are going to slowly start evolving over the next couple of months and we are looking forward to seeing how UPS stands up to the challenge. 

Investing in Fulfillment

According to an article from RetailDive, e-commerce, which was already on the rise before the pandemic, could lead to stores worldwide dedicating up to a third of their in-store space to online order fulfillment. Researchers say that the retailers that were already experimenting with using their stores to fulfill orders had an advantage during last year's pandemic boom. Analysts at Edge by Ascential predict that the e-commerce invasion in the United States will rise from 22.1% in 2020 and will overtake in-store sales by 2025. This is based partly on the firm's prediction that 34.8% of global chain retail would be online by 2023, up from 30 percent in 2021 and nearly 40% by 2025.

Warehouse space is becoming a hot commodity for non-box stores without sizeable in-store space for online fulfillment. In May, GameStop confirmed its leasing of a 700,000 square-foot fulfillment center in York, Pennsylvania, as part of its North American expansion strategy. According to The Motley Fool, GameStop expects that the center, which will open in the fourth quarter of this year, will allow it to speed up shipping along the East Coast for its e-commerce ambitions while also allowing it to expand its product catalog. This month, it announced another fulfillment center lease for 530,000 square feet in Reno, Nevada, to meet the same needs as the York location but on the West Coast. It is effectively doubling its existing distribution space in the United States.

Walmart Selling E-commerce Tech

Walmart has created an e-commerce system that can now be purchased by small and medium-sized retailers that allow their customers to buy said retailer products online and pick them up at a Walmart location. CNBC reports that the move is consistent with the company's strategy of establishing new businesses that serve new customers and allow profit to flow back into the company. Additionally, it has partnered with Adobe to offer a suite of cloud-based services with the order management system, sold as a subscription. "I'm betting my life on this," says Anshu Bhardwaj, Walmart's vice president of technology strategy and commercialization. With Walmart providing the technology that allows employees to pick and pack online purchases, small and midsize retailers will also be able to add products to Walmart's online marketplace with a few clicks.

So, as you can see, Q3 started with a bang! Many online retailers saw a surge in business, which resulted in even more concerns as we move forward. With the future of Covid-19 restrictions continuously changing, many believe e-commerce will maintain precedence as the primary way for consumers to shop. As companies look to adapt to meet demand in a highly saturated market, it is clear that investing in infrastructure continues to be a high priority.