Initial market analysis data on the recently completed 2019 holiday shopping period point to yet another increase in online spending.

Most media outlets have cited analysis data published by Mastercard Pulse, for the shopping period from November 1 through December 24, which analyzes U.S. retail sales across all payment types in select markets. In a release published the day after the Christmas holiday, the report headline was that holiday sales grew 3.5 percent during the recently completed period. That number represents the low range of the National Retail Federation’s (NRF) original holiday retail sales forecast. Holiday Customer Fulfillment

According to the report online sales rose 18.8 percent from that of the year-earlier period, establishing yet another record, with 14.6 percent of total retail sales now in the online column.  In-store sales growth was a meager 1.2 percent.

As Supply Chain Matters has indicated in prior holiday fulfillment surge commentary, this year’s condensed shopping period caused many consumers to wait longer to initiate their holiday purchases. The NRF polled upwards of 7800 consumers during the November 27 thru December 5 period revealing an indication that 52 percent of consumers had completed their holiday shopping by that period. That compared to 58 percent reported in the 2018 survey conducted in the same time period.

The last Saturday prior to the Christmas holiday, termed Super Saturday, again turned out to be the largest sales day.

Parcel carriers FedEx, UPS and the U.S. Postal Service were again tested throughout the holiday fulfillment period but there are been no reports of major snafus which is noteworthy. FedEx’s CEO indicated to The Wall Street Journal that there were many volume records set for the period, including volume spikes on the Monday after the Thanksgiving holiday and on subsequent Mondays in December. In-turn, UPS expected record holiday shipping volumes.

Amazon.com issued its annual holiday sales press release with the usual blizzard of statistics with little specific indicators of summarized quantitative or financial data, other than this holiday season was record-breaking, with billions of items ordered worldwide. On online retailer added more than 250,000 full and part-time seasonal workers to prepare for 2019 customer fulfillment needs. For the holiday season, volumes reportedly nearly quadrupled for Prime Free One-day and Prime Same Day shipments. There was a reported temporary logistics hiccup that occurred in early December attributed to an unnamed carrier.

Further indicated was that over 3.5 billion customer packages were delivered by the company’s last-mile delivery network in all of 2019.

Summary Thoughts

As Supply Chain Matters has previously cautioned our readers, it is far too early to assess the final financial and operational results of the 2019 holiday fulfillment period. With merchandise returns expected to be upwards of 36 to 39 percent, it will take several more weeks for returned merchandise to be processed by returned logistics centers and for retailers to sort out net sales. Carriers in-turn will be holding off reports of final volumes processed until the activity begins to subside.

All of that stated, it is rather clear that the 2019 holiday period established new online retail milestones and added challenges, all of which will be factored into subsequent shopping holidays.

 

 

Bob Ferrari

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