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July 13 2020 05:54 AM

The global retail sales arena is $25 trillion… yes, I said $25 trillion. The e-commerce world is $2.9 trillion. The coronavirus pandemic has changed the way people purchase items. As the world went into lock-down and sheltered at home, there was a need to have the ability to receive critical items and not go to the store. This has created one of the single largest consumer behavior changes in the world’s history. If we fast forward into a safer US in 2021, we will see a different e-commerce world. There are over 273,000 companies with websites in the US and most have sales under $1 million (83%). E-commerce represents about 11.6% of all retail sales in 2020. This figure will significantly increase next year. Amazon is the market leader, with over 50% market share. Many smaller merchants will get bigger in the next 12 months. Let’s take a look at some of the changes in the coming year:

E-commerce may jump to 15-20% of retail sales

Many brick & mortar stores will close (highest level ever)

Stores will convert 50% of their store space into mini-fulfillment centers

Merchants will use more on-demand warehouses or 3PLs

Global e-commerce will explode with M2C (manufacturer to consumer)

The modern-day consumer has experienced how easy it is to order just about anything, even items that they never thought they would buy online (i.e., toilet paper)! This new experience will flow significantly into the B2B world. Amazon is expecting to be the largest industrial supplier in the world in the near future. The coronavirus pandemic was a catalyst to this change. The major carriers (DHL Express, FedEx, UPS, and the USPS) have truly been the delivery warriors in supporting companies around the world and keeping commerce moving. However, Amazon has also been a key player and adjusted its business model to help fight the pandemic. Its network in the US truly proved that it is the next integrated carrier and it is building out their international capabilities, too.

As time goes on, merchants will need to adjust to this new consumer who will bring their new shopping skills into the B2B world. The B2C world will see an explosion of volume as the shift from stores to e-commerce happens. These changes will happen very quickly as we enter into our “new norm.” Adaptability and speed will be the new levers to success.

Michael J. Ryan is the Executive Vice President at Preferred Shipping (www.preferredship.com) and has over 25 years of experience in the parcel industry. He can be reached at 708.224.1498 or michael.ryan@preferredship.com.


This article originally appeared in the May/June, 2020 issue of PARCEL.

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