The Supply Chain Matters blog continues with highlights of published data regarding the activity levels of holiday fulfillment during the 2020 Thanksgiving thru Cyber Monday holiday shopping period.
In our last published blog on this topic, we highlighted preliminary data related to the Black Friday shopping holiday, traditionally the biggest single day of shopping.
Released data from Adobe Analytics indicates that Americans spent a reported $10.8 billion in online purchases during the Cyber Monday shopping holiday, an increase of 15 percent from last year’s tally for this same shopping day. Adobe declared that the Cyber Monday tally represented the largest online shopping day in U.S. history. However, the $10.8 billion number was on the low end of Adobe’s original estimate. Yesterday, Adobe trimmed its overall forecast of projected online holiday sales to $184 billion, a reduction of $5 billion from a prior forecast.
For the overall five-day period that spanned the Thanksgiving thru Cyber Monday holiday shopping period, indications point to an overall online shopping tally of upwards of $25 billion. That would include indications of online sales amounting to:
$5.1 billion on Thanksgiving Day
$9 billion on Black Friday
$10.8 billion on Cyber Monday
While these tallies on online sales may establish individual single day records, from an overall perspective, they pall to this year’s extended four-day Singles Day online shopping holiday which online platform provided Alibaba indicated a sales level exceeding just over $75 billion.
Yesterday the National Retail Federation (NRF) indicated in a release that an estimated 186.4 million consumers took advantage of the five-day shopping holiday for both in-store and online purchases. That total shopper number was about 2 percent lower than that recorded during the similar period in 2019 when 189.6 million shoppers were reported. However, the most stunning statistic was that 44 percent more consumers shopped only online this year, compared to last year. NRF survey data further indicated that more than 52 percent of holiday shoppers indicating that they took advantage of early holiday sales and promotions.
A further NRF statistic indicated:
“Over the five-day period, shoppers spent an average of $311.75 on holiday-related purchases such as gifts or decorations, down from last year’s total of $361.90 but comparable to 2018’s $313.29. Of that amount, nearly three-quarters ($224.48) was spent directly on gifts.”
From our lens the above total spend statistic is a key indicator of both the economic stress manifested by the ongoing pandemic, and that gift giving was tempered by 25 percent spending on individual needs or perceived bargains.
Amazon Touts Holiday Sales as the Biggest in History
In a published blog post, online retail platform provider indicated that: “through Cyber Monday 2020 has been the largest holiday shopping season so far in our company’s history thanks to customers across the world.”
The company provided no specific sales or volume data other than to indicate that independent businesses, nearly all of which were termed small and medium businesses, selling on the Amazon platform surpassed $4.8 billion in global sales from Black Friday through Cyber Monday, representing a 60 percent increase from last year’s levels. Added was that more than 71,000 small and medium businesses have surpassed $100,000 in sales this holiday season-to-date.
The above data alone is likely to add to ongoing concerns that Amazon has become a far more dominant and influential player in online retail. Likely added evidence to that threat was an announcement this week by competitor Walmart, waiving the $35 minimum purchase requirement for Free Shipping for those enrolled in its recently announced Walmart+ loyalty program.
The blog update further indicated that Amazon has implemented more than 150 new process improvements and safety measures with upwards of $10 billion anticipated to be invested to keep employees safe and to improve delivery commitments. Efforts that were cited included added items for same-day delivery commitment, more flexible delivery day options, extended merchandise return widows and sustainability focused shipping. Readers with corporate and brand marketing experience will likely be able to discern how necessary operational and efficiency needs can be spun towards augmented customer services.
The Last-Mile Fulfillment Crunch is Real
In our previous Black Friday focused update, I indicated to readers that the most significant trend to watch would be the ongoing impacts to logistics, transportation and last-mile delivery networks over the coming days.
An indication of that crunch came from today’s report by The Wall Street Journal indicating that United Parcel Service (UPS) is this week imposing temporary shipping restrictions on some large retailers.
Reportedly on Cyber Monday, UPS informed drivers across the U.S. to stop picking up parcels from six noted branded retailers. The report notes that this directive is a sign of metering currently underway to preserve network performance metrics during the busiest shipping weeks of the year.
A UPS spokesperson indicted to the publication that the parcel carrier: “will pick-up packages from customers whose demand exceeded allocated space once more capacity becomes available.” The same spokesperson reportedly indicated that the parcel carrier is working with its largest shippers to steer volumes to locations with available capacity.
In a prior blog published last Friday, we highlighted for readers a MultiChannel Merchant report indicating that Amazon advised its independent Seller Fulfilled Prime shippers to cutback on the use of FedEx Ground and Home Delivery Services because of longer delivery times being experienced.
From our lens, the above developments are indeed the indicator that parcel networks are being crunched by the overall combination of holiday, pandemic and medical related existing shopping volumes. How long this persists and to what degree networks are stressed is indeed an area to continue to monitor.
© Copyright 2020, The Ferrari Consulting and Research Group and the Supply Chain Matters® blog. All rights reserved.