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With the holiday shopping season jingle bell
rocking, shippers are straining under the weight of Americans’ online
ordering habits.
Having reached allotted capacity, UPS told its
drivers to stop picking up packages at six major retailers, including Nike
and Gap, to maintain performance standards, the WSJ reports.
Amazon is even offering a rebate (we’ve seen
$2–$3) for some of the company’s digital products if you select the “No-Rush
Shipping” option, presumably so it can reduce the strain on its own
fulfillment network.
Boom times
We’ll look back on this past week as a milestone in
e-commerce adoption. During a five-day stretch that included Black Friday
and Cyber Monday, online shopping increased 44% over last year, per the
National Retail Federation.
- Shopify,
a platform that’s home to 1+ million merchants, reported that Black
Friday sales increased 75% annually to $2.4 billion, per Retail Brew.
Its stock is up more than 160% this year.
- At
the same time, far fewer people are shopping at brick-and-mortar
locations. U.S. store visits dropped more
than 50% on Black Friday from last year.
Follow the
money
The investors with the biggest pockets are making
bets on the physical infrastructure that powers e-commerce:
warehouses.
- Just
yesterday, Bloomberg reported that private equity firm KKR is close to
acquiring about
100 warehouses in the U.S. for more than $800 million (the deal could
close next week).
- But
KKR is playing catchup—fellow PE giant Blackstone bought more than $25 billion
worth of industrial properties last year alone.
Bottom line: With consumers feeling more
comfortable shopping online and companies rapidly expanding their
e-commerce infrastructure, the retail industry has been catapulted years
into the future by the pandemic.
+ Dive deeper: 1) A New York Times feature on
Shopify and 2) a report on the tech
behind e-commerce from Retail Brew and Emerging Tech Brew.
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