With six less shopping days in this holiday season, retailers are pressured to not just breakeven but to make a profit in this slightly abbreviated season. As such, the lead up to the season has seen inventory levels increase over last year with intermodal rail containers increasing 7.2% in October. Anecdotal evidence further suggests a bump in airfreight as well because of new high-tech gadget launches as well.
The traditional start to holiday shopping started during the Thanksgiving holiday. “Black Friday” came early for many retailers who chose to open early on Thanksgiving Day with discounts to attract consumers to stores. However, a non-scientific survey by the National Retail Federation (NRF) found that shopper spending over the Thanksgiving weekend dropped for the first time in at least seven years. In fact, US shoppers spent almost 3% less than they did a year earlier during the period.
Instead, and not surprising, online sales was the clear winner. According to Adobe Systems which tracks activity on more than 1,000 US retail websites, Cyber Monday sales rose 16% to a record $2.29bn. About 18.3% of those sales were from consumers using mobile devices, an increase of 80% from last year.
This year’s Cyber Monday capped the highest five-day online sales period on record, according to other estimates. From Thanksgiving Day through Cyber Monday online sales climbed 16.5% over the same period in 2012.
ChannelAdvisor clients saw Amazon sales jump 46% on Cyber Monday and 35% through the “Cyber Five” period from Thanksgiving through Monday.
It appears the growth is not just a boon for online retailers as Bricks-and- mortar chains that have successfully integrated their e-commerce and in-store businesses also appear to have gained from the online growth. For example, Joel Anderson, CEO of Walmart.com expects that more than half of Cyber Monday’s online traffic will have come from mobile devices. On Black Friday, mobile accounted for 55% of traffic to Walmart.com.
How will this translate for the big parcel delivery companies – FedEx and UPS? Big. According to FedEx, it estimates it will deliver 22m packages around the world. In fact, it is the first time the company’s peak day has coincided with Cyber Monday.
For UPS, it expects pick-up volume on Cyber Monday to top 32m packages globally, an increase of 10%.
Like many consumers shopping via mobile devices, FedEx and UPS services such as FedEx Delivery Manager and UPS My Choice allow consumers to pick delivery windows, change delivery locations, and receive and send text messages and more through their mobile devices and/or laptops. These services demonstrate the change in the retail environment in which the consumer is not only well-connected but more mobile.This mobility and connectivity is also spilling into the workspace, distribution centers and other work locations as more and more work is done via mobile devices. Logistics providers looking to differentiate themselves in a crowded market should look towards mobile device service offerings.