E-Commerce Sales Grow, but Big and Bulky Items Have a Logistics Problem

May 20, 2021


The latest US Census Bureau’s first-quarter e-commerce retail sales show a slight pull back, most likely due to consumers returning to physical stores thanks to the growing availability of COVID-19 vaccinations.

According to the US Census Bureau, retail e-commerce sales for the first quarter totaled $196.7 billion, a 16.7% decrease from the fourth quarter. However, year-over-year, e-commerce sales increased 39% and currently represent 13.4% of total retail sales.

E-Commerce sales on bulky items enjoys huge growth year over year

Indeed, consumers have become more accustomed to purchasing all kinds of items, big and small, online. For example, the Census Bureau noted that e-commerce sales for furniture and home furnishings increased 49% year-over-year for the first quarter and e-commerce sales for building materials and garden equipment (such as from home improvement stores) increased a whopping 63.1% year-over-year.

A new survey sponsored by uShip, a logistics technology platform for large and bulky goods, found that 64% of survey respondents purchased oversized items. Of those, 73% had purchased these items online at the same or higher frequency than before the COVID-19 pandemic.

Looking forward after the pandemic subsides, when asked, “how likely are you to continue ordering large and bulky items online?” 45% of survey respondents indicated they were very or somewhat likely to continue buying large items online – a promising sign. However, that leaves 55% who indicated they are either very or somewhat unlikely to continue buying large items online or neither likely nor unlikely to do so.

Logistics presents big problem for big items

There could be a number of reasons why over half of survey respondents preferred shopping for large items in-person, but one strong possibility could involve logistics.

Perhaps one of the most visible examples has been Peloton. Due to pandemic-related closures and hesitancy to return to physical stores last year, Peloton Interactive could not keep up with orders for its stationary bikes and treadmills. In November, the CEO noted persistent delivery delays due to supply chain issues and “periodic warehouse closures associated with COVID-19.” By February of this year, Peloton announced that it would start shipping its products by air to ease delivery delays.

Many shippers, e-commerce and non-e-commerce related, are also reporting delivery delays that have begun at ports and airports, subsequently trickling down to the last mile as record import volumes enter the US to replenish inventories.

Shippers should continue to be creative with delivery solutions

Delays and expense are a concern for shippers - and for big, bulky items costs are a particular concern. FedEx and UPS have increased surcharges to handle these items. And, for the first time, the USPS introduced a surcharge on larger items: A $100 fee will be assessed on parcels ‘found in the mailstream’ that exceed the maximum mailable size limit which is a combined length and girth greater than 130 inches.

Less-than-truckload (LTL) carriers such as J.B. Hunt and XPO Logistics also offer last-mile delivery services and could, potentially, be a better alternative to FedEx and UPS. However, shippers will need to compare rates and service offerings, and visibility tools for scheduling and tracking shipments before deciding on the best solution.

 


ABOUT SPEND MANAGEMENT EXPERTS

Spend Management Experts provides strategic guidance to optimize your supply chain. Using cost modeling technology and market intelligence, we help companies with their transportation, distribution and fulfillment spend. Often large shippers can reduce their spend across the supply chain by 20% or more. We specialize in reducing distribution costs, increasing efficiencies, dynamic reporting, greater budgeting and forecasting accuracy and optimizing supply chain execution. We leverage our proprietary models to identify savings and build negotiation strategies based on data and business cases. As industry experts, our fresh approach provides clients with straightforward details on exactly how savings are derived. Spend Management Experts is your competitive edge, delivered.

Connect with Spend Management Experts on TwitterLinkedIn, and the Spend Management Experts blog.

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E-Commerce Sales Grow, but Big and Bulky Items Have a Logistics Problem

May 20, 2021


The latest US Census Bureau’s first-quarter e-commerce retail sales show a slight pull back, most likely due to consumers returning to physical stores thanks to the growing availability of COVID-19 vaccinations. According to the US Census Bureau, retail e-commerce sales for the first quarter totaled $196.7 billion, a 16.7% decrease from the fourth quarter. However, year-over-year, e-commerce sales increased 39% and currently represent 13.4% of total retail sales.

E-Commerce sales on bulky items enjoys huge growth year over year

Indeed, consumers have become more accustomed to purchasing all kinds of items, big and small, online. For example, the Census Bureau noted that e-commerce sales for furniture and home furnishings increased 49% year-over-year for the first quarter and e-commerce sales for building materials and garden equipment (such as from home improvement stores) increased a whopping 63.1% year-over-year. A new survey sponsored by uShip, a logistics technology platform for large and bulky goods, found that 64% of survey respondents purchased oversized items. Of those, 73% had purchased these items online at the same or higher frequency than before the COVID-19 pandemic. Looking forward after the pandemic subsides, when asked, “how likely are you to continue ordering large and bulky items online?” 45% of survey respondents indicated they were very or somewhat likely to continue buying large items online – a promising sign. However, that leaves 55% who indicated they are either very or somewhat unlikely to continue buying large items online or neither likely nor unlikely to do so.

Logistics presents big problem for big items

There could be a number of reasons why over half of survey respondents preferred shopping for large items in-person, but one strong possibility could involve logistics. Perhaps one of the most visible examples has been Peloton. Due to pandemic-related closures and hesitancy to return to physical stores last year, Peloton Interactive could not keep up with orders for its stationary bikes and treadmills. In November, the CEO noted persistent delivery delays due to supply chain issues and “periodic warehouse closures associated with COVID-19.” By February of this year, Peloton announced that it would start shipping its products by air to ease delivery delays. Many shippers, e-commerce and non-e-commerce related, are also reporting delivery delays that have begun at ports and airports, subsequently trickling down to the last mile as record import volumes enter the US to replenish inventories.

Shippers should continue to be creative with delivery solutions

Delays and expense are a concern for shippers - and for big, bulky items costs are a particular concern. FedEx and UPS have increased surcharges to handle these items. And, for the first time, the USPS introduced a surcharge on larger items: A $100 fee will be assessed on parcels ‘found in the mailstream’ that exceed the maximum mailable size limit which is a combined length and girth greater than 130 inches. Less-than-truckload (LTL) carriers such as J.B. Hunt and XPO Logistics also offer last-mile delivery services and could, potentially, be a better alternative to FedEx and UPS. However, shippers will need to compare rates and service offerings, and visibility tools for scheduling and tracking shipments before deciding on the best solution.  

ABOUT SPEND MANAGEMENT EXPERTS

Spend Management Experts provides strategic guidance to optimize your supply chain. Using cost modeling technology and market intelligence, we help companies with their transportation, distribution and fulfillment spend. Often large shippers can reduce their spend across the supply chain by 20% or more. We specialize in reducing distribution costs, increasing efficiencies, dynamic reporting, greater budgeting and forecasting accuracy and optimizing supply chain execution. We leverage our proprietary models to identify savings and build negotiation strategies based on data and business cases. As industry experts, our fresh approach provides clients with straightforward details on exactly how savings are derived. Spend Management Experts is your competitive edge, delivered. Connect with Spend Management Experts on TwitterLinkedIn, and the Spend Management Experts blog.

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