Retail

Shipping Inconsistencies Plague Nonessential eCommerce

Shipping Concerns In Nonessential eCommerce

Nonessential retail is highly dependent – in some cases, completely dependent – on eCommerce during the COVID-19 crisis. And eCommerce success is dependent upon shipping. Therein lies a serious problem. Because as anyone who has ordered a nonessential item over the past few weeks can attest, eCommerce shipping has become a guessing game.

To illustrate the point, PYMNTS compared shipping dates on three items, chosen for their nonessential status and the actual purchase patterns of staff members on Thursday (April 2). The first item was a hooded raincoat from Anne Klein. Macy’s and Amazon promised delivery by Tuesday (April 7). Anne Klein redirected to Macy’s. Net-A-Porter, however, had a message saying its distribution center was closed due to the COVID-19 crisis.

The second item: Nike Women’s Air Max 270 running shoes. Nike and Finish Line committed to April 7 delivery, while Amazon committed to a spread of April 9 to April 17. Knowing that Nike and Amazon were in the process of breaking their sales agreement, we tried a third item: a copy of Thomas Piketty’s new book, “Capital and Ideology.” Amazon’s delivery date was April 24, while Barnes and Noble promised April 8. Indie bookstore Powell’s in Portland, Oregon couldn’t guarantee that the order would be processed until seven to 14 days. It committed to shipping two or three days after the order was processed.

The first reason for the inconsistency is the varied status of distribution centers. Some run smoother than others, as a matter of course. Some are fully staffed, while others have been hit by the virus. Some states, such as New Jersey and New York, have granted distribution centers “essential” status, so they can remain open. Other states have not, unless the center is dedicated to essential products like food and water. As is Amazon’s case, some distribution workers have walked off the job until they can be guaranteed safety from COVID infection.

“There’s a lot of things that go into being able to make timely deliveries,” noted a VP from a major eCommerce apparel company. “Where is it located? Do you own the building? It’s not so much about product or having inventory in stock. It’s about logistics – and now more than ever, it’s about guaranteeing that your workforce will be safe.”

For example, a Walmart distribution center in Lehigh Valley, Pennsylvania has been hit by nine COVID-19 infections so far, and workers have complained to local press. “As the COVID-19 outbreak swept across the nation, Walmart distribution center employees say they’ve been holding their breath, knowing it would get into the facility, constantly wondering just when it would arrive,” says LehighValleyLive.com. “As it did, news started trickling out amongst shifts over the weekend of March 29, prompting many employees to walk out and take advantage of the unpaid coronavirus leave Walmart is offering. It is a hard decision that some might not be able to afford to make. ‘It is your paycheck or your health,’ a woman, who is currently a problem solver in the consolidation department, said.”

The second reason for the inconsistencies is Amazon itself. At half of the total eCommerce volume, its distribution center can deliver on time when operating normally, but the company has committed to an inconsistent set of priorities as necessary in this crisis. According to Wired, Amazon announced last week that it would stop accepting some items at its warehouses until April 5. In Italy and France, Amazon will deliver only essential items, regardless of what it has in stock. That change sent Amazon sellers on a mission to find new ways to ship their products.

“We understand the impact that COVID-19 has had on many of our selling partners, and appreciate their understanding as we temporarily prioritize high-priority products so we can more quickly receive, restock and ship these products to people who need them during this time, particularly the elderly and those who are most vulnerable to being out in public,” an Amazon spokesperson said in a statement to Wired.

The third issue connected to the distribution centers is shipping capacity. Both FedEx and UPS have had to straddle the lines of delivering their standard packages while also working with various federal and local governments to deliver medical supplies. On Tuesday of last week, UPS announced a collaboration with FEMA to provide supply chain services for the agency’s distribution of personal protective equipment (PPE), including respirators, N95 masks and gloves. As part of the collaboration, FEMA will gain access to UPS’ central Worldport facilities in Louisville for temporary staging. Additionally, UPS is working with “an array of government agencies and companies to support swift transportation of test kits, PPE, supplies and medical devices.”

FedEx has been focused on the logistics behind COVID-19 testing. Last week, it gave a hint as to the complexities behind helping the federal government roll out testing programs. “To ensure weekend support of this mission, FedEx Express dedicated 28 flight legs, as well as specialized pickup and delivery operations. FedEx used its patented SenseAware technology and monitoring to help safely transport the test specimens collected in select U.S. markets to 10 labs operated by Quest Diagnostics and other commercial labs, helping to ensure maximum visibility of the shipments while in transit,” it said in a statement. “The Department of Health and Human Services aided in collecting, packaging and sealing test sample boxes with the SenseAware devices before they were shipped via FedEx Express First Overnight with Priority Alert monitoring for delivery by 8 a.m. the next day.”

As is the case with so many dynamics during this crisis, it’s hard to know whether consumers will place orders without the availability of short-term delivery. And time will tell whether they will forgive late deliveries. One thing is certain: eCommerce has provided a leveling platform for many direct-to-consumer (D2C) brands, and that momentum could be in danger.

“Even though consumers are buying more products online due to the coronavirus, digitally native D2C brands should anticipate hardships in the coming months,” said eMarketer Senior Forecasting Analyst Oscar Orozco. “Sales will continue to shift from nice-to-have products to must-have products, with D2C brands falling under the nonessential category. Disruptions in the supply chain are also likely. That will mean slower shipping times, normally a distinguishing factor for D2C products.”

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New PYMNTS Study: Subscription Commerce Conversion Index – July 2020 

Staying home 24/7 has consumers turning to subscription services for both entertainment and their day-to-day needs. While that’s a great opportunity for providers, it also presents a challenge — 27.4 million consumers are looking to cancel their subscriptions because of friction and cost concerns. In the latest Subscription Commerce Conversion Index, PYMNTS reveals the five key features that can help companies keep subscribers loyal despite today’s challenging economic times.

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