Ware2Go merchant survey points to unprecedented holiday season
More than one-third of respondents opened an online store for the first time in past six months, while 74% expect to see an additional spike in demand during the holiday season. Challenges include the 38% who struggled with on-time delivery.
Ware2Go, which provides an on-demand fulfillment network and integrated tech platform for merchants, today announced results of a new survey illustrating that a majority of merchants are currently operating at peak shipping levels due to pandemic-driven demand.
The rise of the digital-first economy, brought on by retail shutdowns and stay-at-home orders issued in response to the COVID-19 pandemic, has changed the way today’s merchants do business, according to Ware2Go’s survey findings. In fact, 77% of merchants reported changing their selling strategy in response to COVID-19, with 35% of merchants launching an online store for the first time.
The new survey found that 56% of merchants reported an increase in new customers in the last six months, which is directly in line with Ware2Go’s consumer survey released in May, in which 55% of consumers indicated making a purchase from a retailer they had never shopped with before. Additionally, 28% of merchants say they have ordered more product than ever before, while 25% started selling new products, and 22% opened a new sales channel.
This volume shift from traditional sales channels to direct-to-consumer ecommerce channels led merchants to change their approach to order fulfillment as well. Consumer preference for fast shipping did not subside as a result of the pandemic, and merchants had to adjust their fulfillment strategy to meet the demands of their new selling strategy:
- 56% began offering no-contact delivery
- 34% added 2-day shipping guarantees
- 28% began shipping direct to consumer
But many legacy supply chain models were unable to pivot overnight, leading 92% of merchants to report pain points managing their supply chain. The survey found that
- 38% struggled with on-time delivery,
- 36% experienced warehouse shutdowns,
- and 24% found vendors weren’t flexible with the change in their business model.
Merchants are now planning for an unprecedented peak season. Warehouses and fulfillment centers are already operating at peak levels, but 74% of merchants still expect to see an additional spike in sales for the holiday season. The Ware2Go survey also found that 56% believe peak will be at or above 2019 levels, while 44% believe peak will be lower than 2019
Most merchants are familiar with the demands of seasonal spikes in demand, with 80% reporting some level of seasonality in their business, which inevitably results in its own supply chain challenges. For example, 48% of merchants report running out of stock during their peak season, and 45.6% report delayed fulfillment and shipping speeds
Merchants are also well aware that holiday expectations for fast delivery are even greater, with 77% of merchants planning to offer 2-day shipping guarantees around the holidays, compared with 41% that offer 2-day shipping year-round.
The strategy most merchants seem to be taking to stay ahead of the holiday rush is to start sales early, with 50% of merchants beginning holiday promotions in September or October. But with so many unknowns surrounding this year’s peak season, merchants must be prepared for a range of possible outcomes. Ware2Go CEO Steve Denton believes that supply chain flexibility will win the day in this unpredictable market.
“The current situation requires merchants to prepare for a holiday season where historical trends are not as relevant, while maintaining the flexibility to adapt to today’s new economy,” commented Denton. “Today’s market conditions require merchants to leverage a flexible supply chain as a strategic asset for commerce.”
The survey was conducted in August 2020 by Propeller Insights on behalf of Ware2Go. It polled some 250 merchants operating both online and brick-and-mortar businesses, with revenues ranging from $2 million to $200 million.
