Another month of 2021 down, which means another wrap-up of industry news coming your way! Typical to past Q1 months, it was a slow movement in industry news. And yet, with the pandemic still ongoing, this March seemed busier than usual. From supply chain clogs to planning for the industry's future, here is what happened in March of 2020:
USPS Releases Their 10-year Plan
Late this March, USPS released their 10-year plan to recuperate lost revenue. Their overall objectives are to increase shipping costs and slow down delivery times. The New York Times on March 23rd reported that "Among other things, the plan would reduce post office hours, consolidate locations, limit the use of planes to deliver the mail and loosen the delivery standard for first-class mail from within three days in the continental United States to within five days, an effort to meet the agency's 95 percent target for on-time delivery." With projected losses of more than $100 billion, significant changes will have to happen to keep USPS afloat. Though this plan was announced in March, news on how soon we'll see the changes have yet to be released.
FedEx Adding "Afternoon Deliveries"
As the demand for better, faster, and cheaper deliveries increases, FedEx has added more services. Though afternoon delivery services already exist, known as FedEx Express, the new services will essentially be a second wave of afternoon deliveries to meet volume demand in specific markets. FedEx Express says, "While the COVID-19 pandemic has accelerated the growth of e-commerce, we have continued to transform the FedEx Express network to improve operational efficiencies and better serve our customers." FedEx Express has seen an increase in deliveries; with Commercial Appeal reporting, average daily U.S. volume grew by 15% for FedEx Express than the same period a year before. FedEx Expresses extended afternoon deliveries will roll out in specific locations and will be starting soon.
Consumer E-commerce Spending Projected to Hit $1 Trillion
You read that right; experts expect e-commerce sales to hit $1 trillion by the end of 2021. In March, Adobe released new study results that used consumer spending from the first two months of 2021 and data from 2020. They also state that even though the U.S. is limiting its restrictions and opening up the economy, consumer behavior has officially switched online. PYMNTS recently did a "Pandenomics" report, saying even consumers who plan to get vaccinated are "very" or "extremely" unlikely to go back to shopping in stores. They found that around 75% of those surveyed believe that they will keep up their online activities at least somewhat as often even after the pandemic subsides. Though we don't have a crystal ball, we think that Adobe is right on the mark about their predictions. If you want more information on this research, read our blog here.
Consumers are Abandoning Online Shopping Carts
Is it boredom or unsatisfied customers? Since the pandemic, cart abandonment has increased by around 10%. "Last June, Jordan Elkind, who, at the time, served as the VP of retail insights for customer data and identity platform Amperity, told Today that data from the onset of the pandemic showed a 94.4% cart abandonment rate, compared to 85.1% in the comparable period last year. That would equate to billions of dollars in forgone e-commerce revenue, he said." CNBC's report continues to say that despite the high cart abandonment statistic, retailers aren't worried. They believe that these rates also equate to more consumers looking at their products and even finding their store for the first time. Cart abandonment doesn't always mean that you've lost a customer and is a great way to understand why some consumers aren't purchasing.
Shipping Container Delays Cause E-commerce Delays
Since the beginning of the pandemic, supply chains have stalled. Originally the halt in supply chains started with factories and shipping centers closing worldwide. Once these began to open up again, they were way behind in the game, with consumers flooding to purchase everything online. On March 23rd, a massive ship carrying shipping containers became stuck in the narrow Suez Canal, creating a massive traffic jam. With global supply chains already under stress, this traffic jam only adds to consumers' and retailers' stress. A recent New York Times article put it perfectly, "Around the planet, the pandemic has disrupted trade to an extraordinary degree, driving up the cost of shipping goods and adding a fresh challenge to the global economic recovery. The virus has thrown off the choreography of moving cargo from one continent to another." This container ship traffic jam clearly shows that we have a lot left to restore balance to the worldwide supply chain.
The big question for March reflected on: will e-commerce ever slow back down? As the months progress into the new year, we think not. While companies have a lot to do to keep up with the current demand, we believe demand will stay the same if not increase in the following months. As companies start to make the official switch online and e-commerce focused technology, start-ups are working overtime to deliver on new inventions to help "revolutionize" the industry; we don't see this e-commerce craze slowing down anytime soon. How will your online business pivot with these new changes?