The National Retail Federation estimates that 154 million consumers started their holiday shopping over Thanksgiving weekend – that’s 3 million more shoppers than we saw one year ago.
Of those, 44 percent got their deals online while 40 percent opted to shop in-store. And they’re far from finished: Only nine percent of consumers will have finished their holiday shopping by the end of the first weekend in December. The National Retail Federation estimated 122 million Americans planned to shop online on Cyber Monday, up from the 121 million who logged on to shop on that particular day last year.
It’s easy to see why retailers and delivery providers have been ramping up hiring to prepare for this very moment and for the billions of orders that will be processed, packed, and delivered over the next four weeks.
But what about the weeks, months, and years that come after that? What will the holiday shopping season look like in 2017? 2020?
We are barreling toward a tipping point in delivery volumes. There are only so many hours in the day, but consumers increasingly desire their orders to be delivered on two-day, next-day, or same-day schedules.
Millions more orders. Same number of hours on the clock in which to get them there.
This harrowing math equation is encouraging retailers and fulfillers to gobble up warehouse real estate so their delivery radius can be shortened by a few precious hours. Meanwhile, labor to manage the over-the-road delivery of goods is more scarce than ever.
The other X-factor in this equation? Consumers. Not only do they want things delivered fast – and preferably free – they are also changing the rules of what an at-home brand experience should look like, and they’ve even got feelings about what happens with all that cardboard after their unboxing is done.
The e-commerce challenges our consumer economy faces today aren’t just temporary headlines – they are harbingers of what’s to come, illuminating micro trends that will soon turn into powerful tides.
The definition of fulfillment will change. Already the word “omnichannel” has stretched to apply to multiple fulfillment models including drop-shipping and ship from store. In the future, fulfillment will performed by everyone from OEMs and major 3PLs to an Uber-esque network of independent packers, drivers, and small parcel shippers. This will continue to reshape the rules of accountability in the supply chain: Who pays when there is damage? Who owns the last mile of delivery or the last moment of truth with a consumer? Packaging will play a bigger role than ever in ensuring product integrity and an ideal customer experience no matter whose hands touch each order first, third, or last.
Labor pressures will intensify. It’s the first variable to get squeezed in the more volume-same hours equation, and the pressure will be amplified by a lack of skilled labor. Smart, scalable automation and systems that model, prompt, and correct the practices of human packers will provide much needed relief and volume growth.
Shipping costs will not cap out. More orders, same hours? There’s only one surefire way to get a few more onto every truck load: incentivize manufacturers, retailers, and consumers to shave inches off each order with dimensional weight pricing models. Because rates will continue to rise, package sizes will need to continue to shrink – but without sacrificing protection or consumer satisfaction.
Warehouses will get a long overdue makeover. At sky-high rental prices, every square foot of warehouse space will become precious. This will inspire retailers and fulfillers to re-examine how their operations were designed – many doing so for the first time in years or even decades. Identifying and eliminating inefficiencies throughout the operation will ensure that every resource is being used to it’s greatest return. A good place to start is to consider how much space is currently being occupied by big, bulky packaging materials.
Brands will get up close and personal. Brand loyalty? What’s that? Online shoppers will be increasingly compelled to compare prices and look for the item with the best delivery dates, lowest shipping cost, and the best discount codes. The winner may come down to which retailers know the consumer the best: their delivery preferences, their likelihood of return shipments, and what type of packaging can be recycled curbside in their area and what cannot. Personalization – both of the packaging itself and the entire at-home delivery experience – is the next frontier for retailers looking to stand out from their competitors.
To learn how Sealed Air is addressing these e-commerce fulfillment trends and pushing innovations ahead of the trajectory, explore virtual tours of some of our newest and most advanced solutions.