COVID-19 Market Shift Signals an Unprecedented Holiday Season
24 September 2020 - 11:00PM
Business Wire
New Ware2Go survey shows merchants are
operating at a pandemic-driven peak already with expectations that
a holiday demand spike is still to come.
Ware2Go, the UPS (NYSE:UPS) founded on-demand fulfillment
network and integrated tech platform enabling merchants of any size
to offer one-to-two day shipping, today announced results of a new
survey illustrating that a majority of merchants are currently
operating at peak shipping levels due to pandemic-driven
demand.
The Pandemic’s Impact
The rise of the digital-first economy, brought on by retail
shutdowns and stay-at-home orders issued in response to the
COVID-19 pandemic, has changed the way today’s merchants do
business. In fact, 77% of merchants reported changing their selling
strategy in response to COVID-19, with 35% of merchants launching
an online store for the first time. Consumers have flocked to
online stores in record numbers, and shipping volumes for merchants
have hit record highs. In addition, 56% of merchants reported an
increase in new customers in the last six months, which is directly
in line with Ware2Go’s consumer survey released in May, in which
55% of consumers indicated making a purchase from a retailer they
had never shopped with before. Additionally, 28% of merchants say
they have ordered more product than ever before, while 25% started
selling new products, and 22% opened a new sales channel.
This volume shift from traditional sales channels to
direct-to-consumer ecommerce channels led merchants to change their
approach to order fulfillment as well. Consumer preference for fast
shipping did not subside as a result of the pandemic, and merchants
had to adjust their fulfillment strategy to meet the demands of
their new selling strategy:
- 56% began offering no-contact delivery
- 34% added 2-day shipping guarantees
- 28% began shipping direct to consumer
But many legacy supply chain models were unable to pivot
overnight, leading 92% of merchants to report pain points managing
their supply chain:
- 38% struggled with on-time delivery
- 36% experienced warehouse shutdowns
- 24% found vendors weren't flexible with the
change in their business model
O2 Natural Recovery – A Practical Success Story
Ware2Go’s merchant partner O2 Natural Recovery made a complete
180° in their go-to-market strategy. Prior to the pandemic, half of
their sales were made as retail sales within independently-owned
gyms. After gyms were forced to close their doors in March, O2
launched multiple campaigns that redirected customers to purchase
their product through their Shopify store. The result was 10x
growth in their direct-to-consumer sales, and through a flexible
fulfillment partnership that enabled 98% on-time fulfillment, they
grew their business 5x overall.
Unprecedented Holiday Demand in 2020
Merchants are now planning for an unprecedented peak season.
Warehouses and fulfillment centers are already operating at peak
levels, but 74% of merchants still expect to see an additional
spike in sales for the holiday season. The Ware2Go survey also
found that:
- 56% believe peak will be at or above 2019
levels
- 44% believe peak will be lower than
2019
Most merchants are familiar with the demands of seasonal spikes
in demand, with 80% reporting some level of seasonality in their
business, which inevitably results in its own supply chain
challenges:
- 48% of merchants report running out of stock
during their peak season
- 45.6% report delayed fulfillment and
shipping speeds
Merchants are also well aware that holiday expectations for fast
delivery are even greater, with 77% of merchants planning to offer
2-day shipping guarantees around the holidays, compared with 41%
that offer 2-day shipping year-round.
The strategy most merchants seem to be taking to stay ahead of
the holiday rush is to start sales early, with 50% of merchants
beginning holiday promotions in September or October. But with so
many unknowns surrounding this year’s peak season, merchants must
be prepared for a range of possible outcomes. Ware2Go CEO Steve
Denton believes that supply chain flexibility will win the day in
this unpredictable market.
“The current situation requires merchants to prepare for a
holiday season where historical trends are not as relevant, while
maintaining the flexibility to adapt to today's new economy,”
commented Denton. “Today's market conditions require merchants to
leverage a flexible supply chain as a strategic asset for
commerce.”
About the Survey
The survey was conducted in August 2020 by Propeller Insights on
behalf of Ware2Go. It polled some 250 merchants operating both
online and brick-and-mortar businesses, with revenues ranging from
$2 million to $200 million.
About Ware2Go
Ware2Go, a UPS Company, operates a turnkey nationwide
fulfillment network designed to help merchants easily position
products closer to end customers for a fast, inexpensive and
reliable order-to-delivery experience. Ware2Go offers an integrated
solution for storage, pick, pack, and shipping services to
businesses of all sizes through an intuitive cloud-based technology
platform that makes it easy to extend your distribution footprint
and scale up and down as your operational needs change. Ware2Go
simplifies nationwide fulfillment to help you meet your customers’
needs and expectations. For more information, visit
http://www.ware2go.co/.
For more information about this press release, please contact
Gabrielle Jasinski at gabrielle@bospar.com.
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version on businesswire.com: https://www.businesswire.com/news/home/20200924005051/en/
Gabrielle Jasinski Bospar for Ware2Go 708-732-3913
gabrielle@bospar.com
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