What Online Retailers Should Expect During the 2020 Holiday Shopping Season

Categories: Resouces

Barron’s Magazine reports an expected increase of 1% to 1.5% in holiday shopping, in spite of an economic recession. While smaller than increases in previous years, the anticipation of any growth is encouraging during a year plagued with COVID-19 challenges.

With the continued need to create environments that allow for social distancing, e-commerce retailers continue to thrive with more consumers shifting to online purchasing.

Online holiday shopping is expected to sharply increase during the 2020 holiday season. Salesforce, a leader in CRM software, offers the following predictions:

  • Global digital commerce is expected to increase 30% year over year from 2019 with 35% growth in online sales in the U.S. alone.
  • Total digital sales are expected to reach $940 billion globally and $221 billion in the U.S., a new all-time high for growth.
  • Ecommerce sales are projected to be 18% of total retail sales globally and 30% of total retail sales in the U.S. during this holiday shopping season.
  • Total sales are expected to be flat despite this digital growth, with an expected $5.1 trillion in global holiday sales and $730 billion in U.S. holiday sales.

The initial shift to online shopping began shortly after restrictions were implemented to control the spread of the coronavirus. Retailers and fulfillment centers were quickly challenged with transforming operations to address inventory shortages, production challenges due to closed or limited production facilities, longer lead times to fulfill orders, and increased shipping and delivery times.

Prior to the pandemic, FedEx SVP for Integrated Marketing & Communications reported shipping 100 million packages each day by 2026. Because of recent increases in e-commerce activity, she now projects to hit the same mark in 2023.

FedEx will add 70,000 workers during the holidays season. Dan McMackin, UPS Public Relations Manager, shared plans to hire 100,000 seasonal workers after already hiring 39,000 people during the second quarter of 2020.

Many businesses have been able to adjust operations and plans to address the challenges present in the “new normal.” With a second spike anticipated as a result of seasonal buying, there are likely factors to consider:

  • Sales volume is likely to exceed shipping capacity on a global level. People should expect delays in shipping and should plan to shop and order earlier than usual.
  • COVID-related surcharges have become more common. Shippers should be prepared for these charges to be assessed between mid-November and January. Analysts predict these fees may be limited for higher margin products and more frequent with commodities.
  • Holiday demand will start sooner, especially given Amazon’s Prime Day event in mid-October.
  • Black Friday sales are expected to see declines with fewer in-person purchases, however, Cyber Week should see growth of 28% year-over-year.
  • With increases in online purchases, returns are more likely. Including detailed product descriptions, fit guides, videos, photos, and reviews may help to better educate purchasers and reduce returns.

Order fulfillment companies can help you to minimize the stress and management associated with packing and shipping orders. Product Fulfillment Solutions will work with your business to develop a strategic and cohesive plan designed to address your anticipated holiday order activity. You can focus on ways to grow your business while PFS manages fulfilling your orders and managing your inventory.