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As online shopping soars higher with holiday bump, experts expect shipping delays

FILE - Amazon fulfillment center in Etna Township, Ohio in November 2016. (WSYX/WTTE){ }
FILE - Amazon fulfillment center in Etna Township, Ohio in November 2016. (WSYX/WTTE)
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The way you receive your holiday packages could change this year, experts predict, as retail shopping booms and strains delivery services.

Data shows nearly triple-digit growth in online sales during the first half of 2020; quarterly growth between 12 to 14 percent in digital sales is usually considered great, experts say.

"A lot of that growth, digitally, was driven by just a new set of all new consumers that were testing out digital for the first time," Rob Garf, Vice President of Industry Strategy at retail industry firm Salesforce, said. "Maybe that shouldn’t be a surprise, so many people for their health and safety and well-being just didn’t want to go even into the stores that were open."

Garf and his team of analysts call this "the COVID bump," which has raised the starting point the annual holiday shopping rush will be based off, also starting earlier this year.

"Thirty-nine percent of people are planning to shop and finish as early as possible, which means right now, early October," shopping expert Sara Skirboll explained.

Skirboll said retailers know customers are wanting to start early. Amazon just announced its Prime Day sale will happen October 13-14, and you can expect other retailers to jump on board. Experts said retailers are drumming up and dragging sales into the early fall, in hopes of recouping lost revenue due to the pandemic and to avoid shipping and inventory delays.

"The [delivery companies] of the world are going to outweigh the capacity," Garf said. "Our analysis at Salesforce shows they’re going to be 5 percent over capacity."

UPS is currently delivering a number of packages on par with peak holiday shipping, with 70 percent of packages going to homes compared to 50 percent the rest of the year, because of the pandemic. They're also charging companies more.

"The Peak Surcharges reflect current market conditions caused by the pandemic, which includes consumer demand and available capacity," a spokesperson said. "These surcharges are based on our customers’ unique package volume characteristics, and help balance the volume in UPS’s network so we can provide the best possible service for all of our customers."

Earlier this year, UPS hired 39,000 employees to help move small packages, and plans to hire more than 100,000 seasonal employees for the holiday season.

Meanwhile, FedEx is preparing for what they're calling "The Shipathon." The company is ramping up their ground seven-day home deliveries and putting money into automated facilities, ahead of what they expect to be an "unprecedented holiday shopping season," according to a spokesperson. Additionally, FedEx is keeping an eye on capacity levels and also putting some surcharges and fees in place.

Garf said it's unlikely retailers will pass down the costs to customers, instead "they’re going to have to either eat it into their profits or get really creative with how they’re going to deal with that last mile."

Garf's team predicts retailers could look to two alternatives. The first would be to incentivize "buy-online, pick-up in store" services, essentially outsourcing the last leg of delivery to the customer. Or, arguably more interesting, partner with companies like Uber and Lyft, who can innately crowdsource delivery drivers, many of which are struggling as people travel less.

"If you think about it, they have essentially unlimited capacity," Garf explained. "They’re not taking us to the airport, they’re not taking us to movies or restaurants right now, so they can ship those products. I think you should expect that this holiday season."

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Despite the changes and possible hiccups, there are ways for you, the customer, to come out on top:

  • Garf, Skirboll, UPS, and FedEx all agree, start as early as possible to avoid delays and issues with inventory running out
  • Make a list and a budget to stick to
  • Do your research; know who's got what you're looking for at the best price
  • And take a second to think and avoid impulse buys
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