Consumers are staying home to curb the spread of the coronavirus. But they still need to eat, drink and engage in other daily essential routines. That’s putting a big strain on—and bringing big business to—shipping carriers and online merchants, especially those merchants that sell daily household consumables.
With anxiety at an all-time high, wine is considered an essential for many consumers. Online wine merchant Wine Insiders is seeing consumers’ desire to imbibe more firsthand with an enormous surge in sales over the last few weeks.
The retailer is experiencing order volume similar to Black Friday and Cyber Monday, CEO Zac Brandenberg says. “We’re absolutely seeing a spike in demand, with a specific geographic focus from the Western states,” he says. Orders from Western states, which are hit the hardest in the United States by the global pandemic, are about double the rest of the country, he says.
Monday, March 9, marked one of the retailer’s top four sales days in the past 365 days. And Monday, March 16 generated even more sales.
On March 16, the West and Northeast both doubled sales volume in the regions over the previous day, far outpacing other regions. On March 17, the South started to pick up, he says. The surge began about a month ago, he says, as order volume crept up in the Northeast and Midwest. “The nationwide leap was last week,” he says.
So far, Wine Insiders has been able to keep up with demand, Brandenberg says. But other retailers of food and household products are feeling the strain of increased demand and have fallen behind.
Retailers feel the strain of increased online orders
Food and household goods retailer Boxed Wholesale, No. 339 in the 2019 Digital Commerce 360 Top 1000, sent an email to customers on March 13 informing them of delivery delays.
“With the recent surge in orders, we are seeing delays in shipments,” the email stated. “Our fulfillment center teammates are working day and night to make sure your order goes out as fast as possible. As always, we’ll email you with delivery timing, so you’ll know when to expect your order.”
Like many other retailers, it said disinfectants, paper goods, and hand sanitizer are regularly selling out and that it is placing order limits on certain popular products. “This helps make sure that as many of our customers as possible have access to these limited availability items,” the note read.
Boxed didn’t respond to a request to comment on if delays have been resolved.
Grocer Meijer Inc. (No. 90) is also feeling the heat of increased order volume. A note on its website observed by our editors on March 18 alerted customers to possible delays. “We are currently experiencing high volume so your order fulfillment may occur after the time you requested. Your shopper will reach out to coordinate timing as they begin your order.” Meijer employs vendor Shipt (owned by Target Corp.), who deploys personal shoppers to shop Meijer stores to fulfill online orders.
Meijer did not respond to a request for comment.
According to fulfillment data from Convey, a last-mile technology vendor, order volume for retailers that sell consumer staples like cleaning and household supplies, has increased from being slightly up year-over-year in early February (6.8%) to growing 52% for the second week of March 2020 compared with the same time last year.
Order fulfillment slows because of the coronavirus
Time to fulfill orders has risen considerably since the outbreak of COVID-19, says Kirsten Newbold-Knipp, chief growth officer. “Over the past three weeks, we’ve seen an increase in fulfillment time of almost 40% (as measured by the length of time between when a shopper hits buy to when the order is picked up by the carrier for delivery),” she says. “It’s gone from 15.1 hours to 21.2 hours.” Fulfillment time data is the average fulfillment time for all shipments shipped out at that time across the Convey platform. Shipments aren’t equivalent to packages.
Convey’s data is based on tens of millions of packages shipped from more than 500,000 U.S. locations across the company’s client base. Analysis excludes Amazon shipments. The vendor has 130 retail clients in many merchandise categories, including retailers The Home Depot Inc. (No. 7), Neiman Marcus (No. 50), Eddie Bauer LLC (No. 161) and Jet.com Inc. (No. 24 in the 2019 Digital Commerce 360 Online Marketplaces database).
Hiring sprees
Several grocers, including Albertsons Cos. (No. 204 and parent of Safeway) and The Kroger Co. (No. 17), are hiring employees to fulfill online orders, while Walmart Inc. (No. 3) is recruiting delivery drivers, according to several reports. Albertsons has also been calling pharmacy customers to promote its prescription delivery service in an effort to avoid customers venturing out to pick up their medications in stores.
Amazon.com Inc. (No 1.) is hiring 100,000 workers and says the company will invest more than $350 million globally and increase pay by $2.00 an hour in the U.S. for employees and contractors who work in fulfillment centers, transportation operations, stores or those making deliveries so that others can remain at home.
Amazon also announced it is suspending inbound Fulfillment by Amazon warehouse shipments of what it calls “non-essential products” through April 5. For now, Amazon’s warehouses will only be accepting new inventory of products that fall into the categories of household staples, medical supplies, and other high-demand categories, such as baby, health, personal care, grocery, industrial and scientific, and pet products.
Consumers are ordering more online as national, state and local authorities demand consumers stay at home as much as possible and practice social distancing. Social distancing is when consumers avoid large crowds and stay at least six feet away from others in an effort to curb the spread of the coronavirus and ease the burden on hospitals and healthcare workers.
57% of consumers have altered their day-to-day activities to be as “contactless” as possible, according to a March 10-11 survey of 500 global consumers in the United States, Canada, the Middle East and Europe by ecommerce implementation vendor Astound Commerce. 47% of consumers have faced out-of-stock product issues, the survey finds.
31% of shoppers have made more online purchases, and 23% have decreased their purchasing at physical store locations.
Additionally:
- 32% have purchased more shelf-stable, frozen or canned goods
- 32% have purchased more health and wellbeing products
- 45% have purchased more cleaning supplies
Shipping carrier UPS in a comment provided to Digital Commerce 360 said it “continues to operate in line with demand and the needs of our customers, except where limited by government restrictions.”
In another email to customers, UPS chairman and CEO David Abney said the carrier is working in partnership with governments around the world to “…obtain exceptions that allow our shipments to continue in restricted areas. UPS’s network planning and operations teams are experienced with adapting to changing conditions, and are developing contingency plans to address potential sources of disruption in our air and ground networks,” he wrote.
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