With the year about to come to an end, here’s a look at the Top 10 stories that shaped direct-to-customer retail in 2015.
DIM Weight Pricing Became Standard
The decision by UPS and FedEx to expand dimensional weight pricing in January 2015 to parcels under three cubic feet – known widely as the DIM rule – was one of the biggest changes to hit shippers in years. It has forced them to rethink their entire approach to packaging and shipping, as millions of items that had been billed based on weight alone are now subject to a calculation based on weight and package dimensions.
Personalization Grows Up
Personalizing the online retail experience is arguably the single most important innovation retailers must embrace to thrive in the new omnichannel world. The convergence of brick and mortar operations with digital retail happened faster than most ever merchants ever expected. Personalization is no longer reserved for retail giants with massive engineering teams and deep pockets. Delivering delightful personalized online shopping experiences is now within every retailer’s reach.
Omnichannel Visibility in the Supply Chain
The growth of ecommerce and omnichannel fulfillment, shortened lead times and heightened customer expectations of next-day and two-day shipping all point to the need for improved supply chain visibility. To meet these pressing demands, manufacturers, retailers and distributors are investing in logistics and supply chain management technology to gain an edge in a competitive environment.
Smartphones Rule Cyber Monday
Smartphones became the Cyber Monday shopper’s device of choice, according to the IBM Watson Trend app. Smartphones accounted for 36.8% of all online traffic, more than three times that of tablets at 11.1%. Smartphones surpassed tablets in sales, driving 15.2% of online sales (up nearly 70% over 2014) versus tablets at 12.4%. IBM says smartphone shoppers spent $102.02 per order. Custora added that 75.5% of all mobile orders were made on Apple devices on Cyber Monday, while only 24.2% happened on Android devices.
Bizrate Insights said 50% of online Cyber Monday buyers reported shopping on a mobile device, up 16% from last year when only 37% reported shopping on Cyber Monday with a mobile device. 41% of online buyers expect Cyber Monday, to be their biggest online shopping day of the year. This is up from 39% on Cyber Monday last year. Mobile made up more than 70% of traffic to Walmart.com, nearly half of its orders since Thanksgiving have been placed on a mobile device – that’s double compared to last year.
Blueprint for Global Expansion
More and more retailers are discovering the wisdom of going global with their ecommerce strategies, and are launching localized websites into new international markets. But to launch a global ecommerce site successfully, you must consider more than just the language barrier. You need to understand and accommodate your new customers’ buying trends and preferred payment methods. And most importantly, ensure that your ecommerce platform offers a multi-language, integrated backend toolkit so that managing your global storefronts is hassle-free. Retailers have an optimistic stance on global expansion and are prepared for it, according to a report by eBay Enterprise. Forty-seven percent said they’re prepared for global expansion while 73% noted they are ahead of the cross-border ecommerce curve.
West Coast Port Dispute Ends
The labor dispute between the International Longshoreman Workers Union (ILWU) and the Pacific Maritime Association is finally resolved. The two parties recently agreed to a new five-year contract, which means normal activity is resuming at 29 West Coast ports, including the critical Ports of Los Angeles and Long Beach. Import cargo volume at the nation’s major retail container ports was expected to increase 8.3 percent in November over the same time last year as consumers begin their holiday shopping, according to the monthly Global Port Tracker report released today by the National Retail Federation and Hackett Associates.
Millennials Dig Same-Day Delivery
Same-day delivery initiatives heated up. A survey from fraud prevention firm Trustev found 56% of consumers aged 18-34 expect a same-day shipping option. A survey by Bizrate Insights found that Millennials are the most interested in same-day delivery with 30% of them saying it is important. But same-day delivery is moving from from traditional couriers to Uber drivers, and Waffle House is even jumping on the bandwagon. Retailers testing the same-day delivery waters include Macy’s and Kohl’s, while eBay gave up on its pilot program.
Amazon, Amazon, Amazon
Is there anything Amazon can’t do, or doesn’t at least plan to do? And Amazon is successful at everything it does… or at least doesn’t fess up to its blunders (Anyone reading this article on a Fire Phone? I didn’t think so!). In 2015, Amazon brought us Prime Day, its own Singles Day-like holiday, which is claimed was a success, despite giving the world any peek into dollars and cents. But Prime Day brought a 14,000% spike in Roomba sales, so it couldn’t have been all that bad, right? If you needed a VHS tape rewinder for your trip back to 1993, or 55 gallons of water based lube, or you are a serial killer, Prime Day was your lucky day.
But Prime Day social media backlash didn’t lead to Amazon’s downfall. Amazon did get space-age with the Amazon Dash buttons, staked a (possibly false) claim that it was now the Number-one marketplace in India, expanded its brand into Mexico, and grew its Prime Now one-hour delivery service to include several U.S. cities. Amazon was also rumored to begin selling to customers in Cuba, and is still hoping it will get permission to deliver packages via drones. Oh, and Amazon may get its own fleet of jets…
Speaking of Jets, Jet.com Took Off
After a few months of beta testing, ecommerce marketplace Jet.com was cleared for takeoff. The July 21 launch of Jet.com gave a good indication of its hoped-for trajectory to $20 billion in annual sales by 2020, according to founder and CEO Marc Lore. Jet bet that its model – predicated on pulling out supply chain costs to drive consumer savings, while making money solely on a $49.99 per year subscription fee – would lead to ultimate success in a space dominated by Amazon. But by October, Jet.com eliminated its membership fee, and Lore said that Jet’s core value proposition had been stronger than the company anticipated, and the average number of units per order is twice what Jet.com has expected.
Holiday 2015, Similar to Holiday 2013
Speaking of Jet.com, it was one of the first ecommerce sellers who came out and said its customers may not receive its ecommerce orders in time for Christmas. The carriers all predicted record-setting holiday season volume, but despite their preparation, still had a hard time keeping up. That’s because sales over Cyber Weekend exploded well beyond everyone’s wildest dreams. UPS had been renting out hundreds of U-Haul and Budget rental trucks to augment its fleet and honor its commitments, seeing it as a cost-effective way to handle the deluge. FedEx had also said it uses rental vehicles to address peak demands, while the USPS was adding minivans in many locations.