Power

Online shopping could make up 30% of all U.S. sales this holiday season

Salesforce thinks that unprecedented shipping volumes could mean that retailers need to be smart about last-mile delivery plans.

Amazon delivery driver

Amazon's Prime Day could have a 'halo effect' on other retailers.

Image: Amazon

Online retailers better brace themselves: New forecasts from Salesforce suggest this will be ecommerce's busiest ever holiday season.

The company expects 30% year-on-year growth in global digital commerce this holiday season, dwarfing last year's 8% growth. That will drive ecommerce to a record high share of total commerce: It predicts that digital sales are expected to account for 18% of all retail globally, and a massive 30% in the U.S. "It took us 20 years to get to 15%, and just over the course of this year we've skyrocketed up to 30%," Salesforce's Rob Garf, VP of industry strategy and insights, told reporters.

That huge surge, driven by worries about in-store social distancing measures and product shortages due to supply chain issues, "is putting a strain on the system," Garf said. Salesforce expects the volume of packages to exceed global shipping capacity by 5%, meaning up to 700 million packages could be delayed.

"Winners and losers this holiday season will be defined by the last mile," Garf said. He suggested that retailers that are working with gig economy companies such as Uber and Lyft to expand their delivery capacity might be putting themselves in a strong position. Other options, he said, included "utilizing the store associates as not only pick-pack-shippers, but also delivery experts," or asking customers to come into stores to collect items, so they at least don't have to browse.

The demand could also cause technical issues. Etsy CTO Mike Fisher recently told Protocol that the company had been working with Google, its cloud provider, to model the holiday season. "Normally it's very predictable," he said, but "this year it's all up in the air." Etsy has been running "premortems" to figure out what might go wrong, as well as putting artificial demand on its system to figure out how much strain it can take.

To address the demand, "retailers are attempting as much as possible to pull forward demand," Garf said. Amazon, ironically, may come to the rescue of many other retailers: Its Prime Day, scheduled for Oct. 13 and 14, will "create this halo effect," Garf said, allowing other retailers to take advantage and start selling earlier than ever. "What that will do, based on our projections, is pull 10% of demand forward" from Cyber Week, Garf said.

Still, some things will have to give. "I would be shocked if the traditional December 17th ground shipping cutoff date stayed intact," Garf said, predicting that shipping deadlines will move much earlier. Time to start buying, then.

This story will appear in tomorrow's Source Code, Protocol's daily guide to what matters in tech. Subscribe here.

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