COVID19 has had an unprecedented effect on the e-commerce supply chain. From March to June, much of the US was in some form of lockdown, watching what was happening in Europe, Asia, and New York. As a result, most people chose to do the bulk of their shopping online. As a result, e-commerce experienced ten years of growth in just three months. No other company exemplifies this more than Amazon.
New developments from Amazon
Amazon is focusing on getting products ever closer to clients (the last mile). While shopping malls are taking a big hit during the pandemic, Amazon plans to convert bankrupted malls into fulfillment centers. They reached sales of 89 billion between April and June, which is a staggering increase from the previous year.
Amazon is canceling FBA due to a lack of space in their warehouses for low-demand products and is pushing clients towards FBM. While they started this push a few years ago with their own brands, the pandemic has sped up their goals.
Which categories are thriving?
When we locked down, the world took to their kitchens for comfort, entertainment, and sustenance. As a result, people needed more ingredients and kitchenware than ever before. Re-stocking staff at the supermarkets were handing out yeast and flour instead of putting in on shelves – and they were often in backorder online. Mixers, pasta & bread makers were a must-have and our social media was flooded with shared recipes.
Inflatable pools were in hot demand, going into backorder while prices shot up. The lines at Home Depot were almost as long as those at Walmart! with so much time on their hands, many people turned to DIY stores to find the tools and materials needed to execute their home projects.
- Health and Beauty
Since salons were closed, mani-pedi products flew off the shelves and hair trimmers sold out quickly. Similarly, people were willing to invest in their health in the wake of a contagious disease, buying 16.7% more supplements and vitamins than usual. With gyms and fitness classes shuttered, at-home work-out equipment also flew off the shelves, along with bikes, kayaks, and paddleboards.
Logitech massively increased its sales on headsets, cameras, and even monitors. There was even a reported monitor shortage at one point! Working from home has affected negatively commercial real estate but has brought business to telecommunication companies, office equipment & technology brands, as well as home improvement companies.
The comfy and cozy apparel world also benefited from this online shopping surge – companies selling pajamas reported a 3-fold increase in their online orders! All of a sudden, loungewear was the height of fashion for a 24/7 indoor life.
Can carriers keep up with demand?
This escalation in online purchases has exponentially increased the workload for carriers such as UPS, USPS, and FedEx. They’re all struggling to deliver the typical volume of the holiday season, every day for months, all while short-staffed due to COVID-19.
Considering that 30% to 40% of sales are done in Q4, are you operationally ready to make the most out of this lucrative time? Ameriworld specializes in pick-pack-ship for e-commerce and retailer’s orders. If you need help with your order fulfillment volume, reach out today!