COVID-19 Market Shift Signals an Unprecedented Holiday Season

Ware2Go, the UPS (NYSE:UPS) founded on-demand fulfillment network and integrated tech platform enabling merchants of any size to offer one-to-two day shipping, 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 Pandemic’s Impact

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. 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. Consumers have flocked to online stores in record numbers, and shipping volumes for merchants have hit record highs. In addition, 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:

• 38% struggled with on-time delivery
• 36% experienced warehouse shutdowns
• 24% found vendors weren't flexible with the change in their business model

O2 Natural Recovery – A Practical Success Story

Ware2Go’s merchant partner O2 Natural Recovery made a complete 180° in their go-to-market strategy. Prior to the pandemic, half of their sales were made as retail sales within independently-owned gyms. After gyms were forced to close their doors in March, O2 launched multiple campaigns that redirected customers to purchase their product through their Shopify store. The result was 10x growth in their direct-to-consumer sales, and through a flexible fulfillment partnership that enabled 98% on-time fulfillment, they grew their business 5x overall.