Package deliveries during the coronavirus have increased exponentially. People are shopping online, and deliveries for consumable products, retail products, supplies, and more have increased to holiday shopping levels every day. The increased levels of package deliveries have led to surcharges and some delays. Drivers are working longer hours and making more daily stops.
The increase in package deliveries has led to additional negative impacts. According to our recent study, porch piracy is on the rise. Thieves simply have more access to packages. Also, retail outlets and mini-malls are closing at alarming rates.
Some of the resources below point to the decline of retail sales, and others show the increase in delivered packages. All six resources indicate the future of business during this period and beyond. Most companies not focusing on shipping and delivering products will continue to find it challenging to stay afloat.
Retail Sales Have Decreased Since the Virus Began
Due to mandatory shutdowns in many states, retail businesses have found it hard to keep the doors open. In addition to state mandates, many people are avoiding in-store shopping unless necessary. The combination of the two has lead to a record decrease in retail sales.
In 2019 US retail sales were up, and momentum was good advancing into the new year. With little warning, retailers went from good sales to little or no sales. The monthly declines continue to show the struggle with customers ordering online instead of in-store shopping.
Retail Bankruptcies are on the Rise
Due to these extreme changes in the business environment, retail bankruptcies have been on the rise. Companies are often not equipped to handle such substantial differences in revenue. Large retailers such as Nieman Marcus, Pier One, JCPenney, and more have filed for bankruptcy in 2020. Some of the retailers have had problems long before the virus hit.
Consumer Spending has Increased
While retail sales and bankruptcies are surging, consumer spending is also increasing. People are still spending money, they are merely adapting alternative purchasing habits. These habits are primarily online, but catalog sales and local micro-targeting is useful as well. A Feb 2020 Harvard business review article lists studies and identifiers that show people are becoming more interested in product catalogs. Simply because a tangible print is something different from the digital world we live in.
UPS Introduces Peak Surcharge Rates
Any business with a regular UPS pick up should know drivers have been incredibly busy. The visible indicator is the delivery surcharges enacted due to increased volume. On June 28th, UPS increased charges for several delivery options due to holiday package delivery levels.
Fed Ex Introduces Peak Surcharge Rates
Fed Ex was the first to introduce an increased delivery surcharge. Beginning on April 6th, Fed Ex informed customers delivery surcharges were growing due to rising volume because of the coronavirus. Since the increase, a list has been posted and updated on June 23rd, indicating the various fees.
The surcharges are for international and express shipments. The updated fee schedule attributes the surcharge to limited air cargo space due to the current pandemic. The demand is simply too high for the supply of available space.
National Ecommerce Sales Were Rising Before the Coronavirus
Statistics from the census bureau show that long before the coronavirus, online sales and package deliveries have been increasing. People are becoming more comfortable with online purchases and the order process.
The coronavirus has only sped up an existing trend. Online shopping eliminates the need for consumers to risk being exposed to others. With many businesses being forced shut, many consumers do not have the option to shop for retail goods at leisure. Calling and placing an order or shopping online are the only options available for some industries that had strong retail presences earlier this year.
Conclusion
The coronavirus did not move us towards increased package deliveries, it only sped up our timeframe. The signs have been there for years; retail is on the decline. Business owners in retail settings must find ways to reach customers outside of the physical location.
Online sales will continue to rise, but many of our businesses are reaching people by local micro-targeting. Within the advertising and materials offered, assurance of safety, and no contact deliveries are being used to reduce customer purchase barriers. Right now, businesses must find a way to make customers feel safe before and after the purchase. As time moves on, people will become more comfortable with deliveries with or without the coronavirus. It is the business owners and management that should adapt to the needs of an evolving society.
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