H2 2020: The State of E-Commerce in the US

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In the past year or so, we looked into the state of e-commerce in countries around Southeast Asia, Europe and Australia.

Today, we are back with new insights on one of the top economies in the world: the United States. 

As the world’s largest economy, the US experienced a 44% growth in e-commerce sales in 2020 — its highest annual growth in over two decades. Consumers are estimated to have spent over $860 billion online, accounting for 21.3% of total retail sales. This growth in e-commerce was so significant that it was the driving factor for all the gains in total retail sales in the US in 2020!

In the midst of the pandemic, stay-at-home orders, and the closure of physical retail stores occurring across the country, how did the e-commerce landscape measure up in 2020?

Here is what we found: 

Parcel volumes saw a 35% spike during the holiday season

Our data found that the holiday period saw a 35% surge in parcel volumes as e-commerce sales jumped over 49%, with carriers in the US setting a new industry record by collectively delivering more than 3 billion parcels! USPS, for instance, experienced a historic record of parcel and mail volume during the holiday season in 2020. 

Most notably, Black Friday and Cyber Monday in the US alone saw a significant increase in parcel volume as consumers spent more than $9 billion online during this major shopping holiday. The unprecedented growth in parcel volumes was mainly driven by the pandemic which saw more people shopping online than ever before.

Note: The holiday season refers to the period from late November to early January, covering major shopping holidays such as Black Friday, Cyber Monday, as well as the Christmas period. 

96% of parcels were successfully delivered on first attempt

Even with the pandemic-fuelled increase in e-commerce sales, 96% of parcels were still delivered successfully on the first attempt. Last-mile delivery is often a huge and expensive challenge to retailers.

A successful first attempt delivery is so crucial as it provides a satisfactory last-mile delivery experience to customers, which improves customer retention. Besides that, successful first attempt deliveries allow retailers to reduce additional costs that are incurred in the process of multiple rescheduled deliveries, storage, and manpower in the event of a failed first attempt at delivery. 

With mandatory stay-at-home orders issued in most states across the US, this significant factor has likely led to the high rates of successful first attempt deliveries. 

57% of parcels are picked up from Collection Points within 24 hours

Even with home delivery seeing high success rates on first attempt delivery, alternative methods of delivery, such as collection points, have also taken off. Collection points offer consumers a safe and convenient alternative to home delivery; consumers gain greater control over when to collect their packages.

Collection points have begun to gain a greater foothold in last-mile delivery in the US, with the US Postal Service (USPS), FedEx, United Parcel Service (UPS) and Amazon offering consumers over 70,000 locations for parcel collection. 

Recently, more carriers have been establishing a growing network of collection points around the US in the form of parcel lockers, third-party retail stores and dropboxes, to name a few.

UPS, for instance, rolled out its very own Access Point network where recipients and retailers can pick up and drop off packages. In an effort to expand its network of lockers, UPS has partnered with big retailers such as Michaels, CVS and Advanced Auto Parts, making collection points even more accessible to consumers. 

While the usage of collection points in the US is lower compared to other countries, these recent developments are encouraging as we foresee collection points gaining more traction in the US in the future. Indeed, the US saw its click-and-collect orders rise 208% in April 2020 compared to the previous year, indicating greater customer adoption of alternative delivery methods in the US in the coming years.  

Beyond 2020How e-commerce would look like after the pandemic remains to be seen, but it is highly likely that the effects of the pandemic, which has significantly influenced consumer behaviour and fuelled e-commerce sales, is likely to persist. We look forward to seeing how the US e-commerce landscape will develop this year.

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