SAN FRANCISCO — The rush to finish holiday shopping is on, only this time instead of filling up malls, people are filling up online carts.
The problems became apparent as early as March, when orders were delayed at times by weeks because of the surge in online shopping and coronavirus restrictions. And the scramble is happening again during the important holiday season, when online sales surge far beyond the usual even in a normal year.
U.S. online shopping sales are projected to reach $795 billion this year, a 32 percent gain from last year, according to research firm eMarketer. Already, the Census Bureau reported that in the second quarter, the nation’s online spending surged to 16 percent of total retail sales, from 11 percent previously. And Forrester Research expects roughly a quarter of all holiday shopping to take place online, up from 20 percent.
Retailers and brands including Costco, Target and Abercrombie and Fitch all warned of potential shipping delays in recent weeks. Shipping giants UPS and FedEx have been controlling volume from retailers and turning down requests for additional deliveries beyond what was decided months ago. That has put even more strain on the U.S. Postal Service to pick up the slack.
“It’s been a nightmare,” said John Haber, CEO of supply chain consultancy Spend Management Experts. The former UPS executive, who now works with retailers on their supply chain strategies, said that some companies were left scrambling in recent weeks when they couldn’t find the capacity to ship as many packages as they needed to.
“I’ve never seen anything like it,” he added, noting that cost increases by the carriers have helped prevent this type of crunch in recent years.
Paula Walling, 72, grew concerned when the tangerines she ordered online from Florida didn’t arrive on time. Her tracking number also seemed to have the wrong spelling of her street name in Marysville, Wash. She trekked to the local post office, however, and sorted it out.
She only started shopping online this year because of the pandemic, and she said she’s understanding of the hiccup.
“Of course they’re overwhelmed, my goodness,” she said. “Everything is so wonky.”
The Postal Service in mid-December encouraged holiday shoppers to mail gifts as soon as possible.
The “historic record of holiday volume compounded by a temporary employee shortage due to the COVID-19 surge, and capacity challenges with airlifts and trucking for moving this historic volume of mail are leading to temporary delays,” the agency said in a statement.
UPS said it is still picking up and delivering all packages it agreed to handle before heading into the peak holiday season. It noted that it has expanded hours and facilities for the peak season, and chief executive Carol B. Tomé said in a news release that it is running “one of the most successful peak holiday shipping seasons ever.” FedEx spokesman John Scruggs said in a statement that the company has seen an “unprecedented surge” in packages this season and has added workers and seven-day delivery, and is working with customers.
Coronavirus restrictions that limited grocery store hours and shut down malls also helped push 17 bricks-and-mortar retailers into bankruptcy this year.
Forrester analyst Sucharita Kodali called the surge “a gift” for online commerce. But she is quick to caution that this surge won’t last. The higher growth rate this year — which she places at 18 percent — was because of the pandemic. Still, many habits could be changed long term, she adds.
Take Tram Tran. By June, the Mesa, Ariz., resident was bored with her Nintendo Switch and cooking “all the food.” So the 27-year-old became a Lululemon super shopper.
She found deals of up to 60 percent off by browsing resell sites like Poshmark and joining Lululemon-specific Facebook groups where fellow members offered to fulfill requests at nearby outlet stores. Within weeks, Tran was reselling the athleisure wear and made $521 in a single month.
While she tracks what she sells, “I don’t keep track of how many things I buy because I don’t want to know how much I’m spending,” said the marketing assistant, who expects to continue the practice for now.
The new crush of online shopping and related delays started as early as March. Consumers tried to buy entire shelves of toilet paper and other basics at stores.
It was about the same time that grocery delivery services, notably Instacart and Amazon, began maxing out on available time slots for contracted shoppers to remotely fill and drop off customer orders.
The delays at Amazon were so bad in the early days of the pandemic that some shoppers, accustomed to Prime two-day shipping, shifted their online spending in a way that boosted other retailers, including Walmart and Target.
(Amazon chief executive Jeff Bezos owns The Washington Post.)
Amazon spokesman Chris Oster said in a statement that Amazon introduced social distancing measures at its warehouses. It also expanded grocery delivery capacity in response to demand. He credited Amazon employees’ hard work “to get necessary supplies directly to the people who needed them, while keeping associates safe and helping our small business partners to continue to generate strong sales on Amazon.”
Amazon also added 400,000 jobs. Walmart’s online sales grew 86 percent in the first half of the year, and Target’s climbed 171 percent, according to Forrester. Other online retailers benefited, too. Struggling online marketplace eBay had a renaissance of sorts, sending its stock soaring.
Artisan marketplace Etsy encouraged small sellers to start making masks on April 7. By June 30, sellers had sold $346 million worth of face coverings.
Angel Cleveland, owner of Etsy shop SymbolicImports in Spartanburg, S.C., watched her sales of wedding and bachelorette gear nosedive in March when “the world went on pause.” She started making masks and quarantine-themed gear, and her sales have quadrupled.
It wasn’t just masks. Consumers turned to food and grocery delivery services in record numbers, helping push food delivery service DoorDash to debut on the stock market in one of the largest initial public offerings of the year.
Ronni Paer, a lawyer in Los Angeles County, was laid off in March and determined to stay home as much as possible because she’s immunocompromised. She gave grocery delivery from her local Ralphs a try, and she hasn’t looked back.
“Now everything is online,” she said, including holiday shopping, food and toys for her three cats and two dogs, and tickets to virtual operas and shows. “We don’t go anywhere.”
The sudden spike of online shopping earlier this year strained shipping networks’ capacity. By early April, both UPS and FedEx had removed their long-standing delivery guarantees for some packages and worked to deliver to more homes.
FedEx executives said on an analyst call in September that they now think 100 million packages will be delivered each day in the country in 2023, three years earlier than their previous estimate.
Pandemic difficulties went beyond delaying packages. They affected the entire supply chain.
In Lancaster, Pa., Gretchen Christina Maser got to know the UPS driver who picks up the candles and home goods she sells to consumers and Whole Foods. He told her the entire year became as busy as the holiday season.
Her new linen spray line was disrupted this spring after she couldn’t get a part for the bottles from her supplier. And in November, her longtime vendor for containers for her best-selling candles told her they were having trouble getting enough in stock. At the last minute, her husband, searching frantically online, found a supplier that still had the containers in stock in New York, though the price was higher than normal.
“I had to do it — there was no choice,” she said.
Online furniture store Burrow, a brand popular with millennials, built its business on the ability to ship an entire living room in a week. But slowdowns with its Italian leather supplier and shipping networks stretched out its expected delivery to as much as 10 weeks at the peak in early summer, recovering slightly to five weeks or less this fall, said Alex Kubo, Burrow’s vice president of e-commerce.
Starting as early as October this year, major retailers including Target and Walmart launched early-bird holiday sales, an attempt to ease the end-of-year crunch, analysts said.
Forrester Research predicts online holiday shopping will likely reach $173 billion this year, a record high.
Many people hustled to finish holiday shopping early, heeding warnings from shipping companies and retailers. Many online shops, especially small sellers, set order deadlines earlier than usual this year.
Lauren Roehl’s custom clothing store, Izspired, set its shipping cutoff day to arrive before Christmas as Dec. 7. The 35-year-old mom went from filling 15 orders a week at her Pottsville, Pa., store before the pandemic to now regularly getting more than 150. Her suppliers ran out of orange shirts in the fall, and her fulfillment turnaround time stretched to two weeks in November as orders poured in. Her customers stayed chill, she said.
She has temporarily shut down ordering on her website so she can try to finish all the existing orders in time to meet shipping deadlines. On Dec. 17, she got a call that more of her supplies are stuck in transit, coming from Ohio. She only hopes customers will be similarly understanding of the uncertain weeks ahead.
“Since May, my business has exponentially exploded,” she said. “I still have not wrapped my head around the volume I’m doing. It just blows my mind.”