“Fate is like a strange, unpopular restaurant filled with odd little waiters who bring you things you never asked for and don’t always like.”
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Nike, Gap, Macy’s, L.L. Bean, Hot Topic, and Newegg were some of the retailers coping with UPS shipping limits on Cyber Monday, an indication that the holiday e-commerce boom may struggle with the logistics of ensuring gifts arrive on time.
Sensing there could be a potential issue, UPS set “specific capacity allocations” for its customers over Black Friday weekend and throughout the holiday season as it works to deliver packages at record volumes, according to MSNBC.
UPS limits holiday shipping; retailers wonder what’s next
The National Retail Federation estimates that online shopping soared 44% during a course of five days that included Black Friday and Cyber Monday, while Adobe reported that all previous one-day e-commerce buying records were shattered on Cyber Monday.
So much online pandemic shopping going on that delivery networks like UPS, “stretched to their limits,” have limited the number of packages they pick up from major retailers like Gap and Nike:https://t.co/PFB8tYFZjW
— Laura J. Nelson 🦅 (@laura_nelson) December 2, 2020
Though UPS says the limits are temporary, both UPS and FedEx have raised prices and stated they’ll hold merchants to previous volume agreements – no exceptions.
The shifting dynamics of power are clear when it comes to store traffic versus online shopping. Retailers are increasingly dependent on delivery companies to fulfill online orders, and store traffic has plummeted during COVID-19.
According to The Wall Street Journal, “The temporary limits, which some drivers say they haven’t seen during previous holiday seasons, are a sign that UPS is metering the flow of packages into its network to preserve its performance during one of the busiest shipping weeks of the year.”
A UPS spokesperson said they’ll pick up packages from customers whose demand exceeded allocated space once more capacity becomes available.
UPS is placing shipping limits on some of its largest retailers as online shopping picks up steam during the holidays.
The restrictions will take effect this week and run throughout the holiday season, the company said. https://t.co/xFfEa3tqwy
— CNN Business (@CNNBusiness) December 3, 2020
Thanks, COVID: Holiday shipping battling with everyday online needs
Just as it has throughout 2020, consumer behavior has changed drastically, with many folks still shopping online versus venturing into stores. This has created yet another perfect storm for retailers this year, with the e-commerce boom causing shipping and supply delays.
As UPS limits shipping for retailers during these crucial days leading up to Christmas, it’s estimated there could be a surplus of up to seven million packages daily.
UPS states they’re working with their shippers to assess capacity and volume.
2020 Holiday e-commerce data
SAP CX customers saw peak order volume during the first part of November (weeks 45 and 46) in contrast to previous years when orders usually start ramping up at that level around Black Friday (week 48).
This aligned with assumptions that e-commerce holiday shopping was starting earlier than previous years. We saw online retail orders increase year over year by 1.5x in volume and 1.8x in gross merchandising value from November 26 to December 1st this year compared to last.
As e-commerce soars, end to end systems still adjusting
Shipping companies have been operating at capacity throughout 2020 as e-commerce has boomed, and the traditional surge in holiday shipping typically accompanies the hiring of thousands of surplus workers to meet the supply and demand. However, potential employees are wary of the coronavirus, as many front-line workers have fallen ill throughout the year.
Not much is certain anymore, but we do know buying behavior after COVID-19 will continue to rely heavily on e-commerce.
According to CNBC, holiday shoppers spent $10.8 billion on Cyber Monday, setting a record for the largest U.S. internet shopping day ever, according to Adobe Analytics data. Cyber Monday spending rose 15.1% year over year.
Knowing that e-commerce will remain a primary avenue for consumers versus in-store, retailers must start making plans to assess their CX, from search to UX to service.
Don't Miss! Get your #holiday retail commerce brand 'health check' in this episode of #CXUnplugged Commerce: today, Dec. 4, on all SAP CX social channels! Join host @BrentLeary and SAP's @CeuMorais in this seasonal live stream show 🎅🏽 🛒 🎁 https://t.co/3Owf09JIHb #cyberweek pic.twitter.com/V4Q7VSPEkD
— SAP Customer Experience #CX (@SAP_CX) December 4, 2020
