E-commerce has increased, and shipping companies like USPS, UPS and FedEx have responded admirably to demand for coronavirus-induced shutdowns and restrictions.
That's the good news for e-commerce sellers. For many companies, the order is strong and delivery service remains reliable. Unfortunately, supply chains (international and domestic) have suffered, making it difficult for some e-commerce companies to maintain inventory levels and take full advantage of new demand. That's the bad news.
The good news
"From the retailers' perspective, we have seen a large increase in total volume," says Mario Paganini, Head of Marketing for Shippo, a company that manufactures software for delivery integration.
“E-commerce is a rare bright spot in the midst of challenging economic times. We see more traditional offline businesses moving online along with increased order volume from existing e-commerce companies, ”said Paganini.
The recent increase in e-commerce orders is well documented. For example, on May 6, 2020, BigCommerce reported that "nearly two million e-commerce transactions were made through" its e-commerce platform last week. That's "32 percent more than Cyber 5 Week 2019" – Thanksgiving, Black Friday, Cyber Saturday, Cyber Sunday and Cyber Monday. It was the fifth week in a row that transactions on the BigCommerce platform surpassed the peak of last year's Christmas shopping season.
This is especially telling, because unlike reports of how sales have increased for Amazon, Walmart and other retailers, many of BigCommerce's customers fall into the SME category. Thus, a significant increase in transactions on the platform is good for SME e-commerce.
More evidence came from Shippo.
"To put this into perspective, in April 2020, the first full month where almost the entire country was under protection, we saw an 80 percent increase in total orders and deliveries across Shippo's network of merchants," Paganini said.
The leading domestic carriers in the United States have come up with the challenge.
"To their credit, USPS, UPS and FedEx have all been very reliable for domestic transport in the middle of Covid-19," Paganini said. "Despite the well-reported delivery delays for Amazon Prime, we did not see much to indicate a deterioration in speed or service from the actual shipping companies."
Carriers like UPS have also helped fight Covid-19.
"In other words, a shipment specified on a two-day arrival before Covid-19 still arrives in two days during Covid-19. Even after announcing potentially extended delivery windows for domestic shipments a few weeks back, our data indicates that USPS delivery times for their peak parcel services remain close to the average before Covid-19. Minor protocol changes have also been made to adapt to Covid-19, such as waiving signature requirements. But overall domestic shipping is still strong, "Paganini said.
The bad news
However, international shipping has not been as consistent. And perhaps more importantly for many companies, commercial shipping – how companies often get stock – has become less reliable during the pandemic.
"While (an increasing number of orders) means more revenue for merchants, it also presents additional challenges for merchants and fulfillment partners," Paganini said.
"We've heard from merchants that keeping track of inventory has been a challenge – both don't have enough to keep up with volume and challenges to speed up production on their supply chains, which are often international, in the middle of Covid-19. increasing the volume, as you might expect, additional load on fulfillment – the actual choice, package and ship, Paganini continued.
“For that matter, many of our merchants are beginning to prepare for mid-season volume, holidays, mid-year. We have seen many merchants hit and even exceed their normal volumes on Black Friday and Cyber Monday all the way through April, forcing them to adapt quickly for greater capacity. "
In the worst case, foreign inventory deliveries do not arrive on time for some e-commerce vendors to meet demand, or shipping costs have increased significantly.
"The cost of moving that load is increasing almost day by day," said Paul Golland, owner of PG Logistics, a freight forwarding business in Australia, according to an article in the Wall Street Journal in May 5, 2020. "You used to get a quote that is valid for 30 days. Now you get it valid for 24 hours, because tomorrow the situation can change again. "
"Although details vary between merchants and industries, total e-commerce sees more purchases and more total buyers than ever among Covid-19. For us, the big question is what do things look like when we eventually return to normal?" Shippos Paganini.
“Right now, we see buyers who previously did not buy online purchases from e-commerce of necessity. In addition, buyers who are already familiar with e-commerce are buying more than before.
“This represents an interesting challenge and opportunity for e-commerce: How do they keep these customers when we return to normal? For us, it is more critical than ever for merchants to deliver stellar customer experiences, including good support and communication, detailed order tracking, easy returns and good brand experiences. "