By Jeff Domansky, Dec 15, 2020
It’s beginning to feel a lot like Christmas and that means last-minute online shopping, higher incidence of fraud, potential delivery delays, and the expectation of a record number of gift and online shopping returns.
We’ve got a few holiday shopping highlights to consider in these last 10 days of hectic holiday shopping.
What’s selling best during holiday shopping?
Recent research from insuranceQuotes.com shows that 47% of US consumers will do all or most of their shopping online this year. But what products are getting the most attention and purchases from consumers?
NPD Group Future of Home report shows the impact of COVID-19, stay-at-home orders, and limits on retail, restaurants, and events. The home products business is expected to grow +15% over 2019 in Q4.
“This year the holidays will be as much, if not more, about the time we spend at home than the time we spend with others,” said Joe Derochowski, home industry advisor at NPD. “In preparation for the holidays, and colder weather across many regions of the country, consumers will be looking to give and get products that both facilitate and enhance their altered celebrations and increased in-home activities.”
Home products showing growth, according to NPD, include kitchen electrics (+19%), non-electric housewares (+13%), home environment appliances (+20%), and personal care products (+2%).
Amazon is having a record holiday shopping season. Among the most popular selling items sold on its site are the Echo Dot speaker, Barack Obama’s A Promised Land memoir, REVLON One-Step Hair Dryer and Volumizer Hot Air Brush, Lite-Brite Ultimate Classic toy, Amazon Smart Plug, and personal DNA test kits from 23andMe Health and Ancestry.com.
What’s on the fraudsters’ shopping list?
Record e-commerce sales are also showing record increases in fraud this year in numerous categories, according to a report from e-commerce fraud prevention group Forter.
Coupon and promotion abuse are a big problem this year. Cyber weekend saw a 173% increase in customers using coupons and a 258% increase in coupon and other promotion abuse attempts.
The analysis of more than $200 billion in online sales by more than 800 million consumers shows some interesting product preferences by fraudsters in several key markets:
- US: iPhones saw 26% times higher fraud attack rates than normal; Xbox gift cards (19x), apparel gift cards (7x); Air Jordan sneakers (14x); UGG boots (12x)
- UK: AirPods (22x); Nintendo Switch (21x); Call of Duty: Black Ops Cold War game (16xthe normal fraud rate)
- France: winter jackets (17x); men’s cologne (11x)
- Germany: iPhone 11 Pro (17x the normal rate).
According to the FBI’s IC3 2019 report, non-payment or non-delivery scams cost US consumers more than $196 million. Credit card fraud accounted for another $100 million in losses. Despite the small but important rebound in online sales, the accompanying fraud is a growing concern.
Record returns will require reverse logistics responsiveness
It’s crunch time as retailers and online sellers go all out to ship last-minute purchases to consumers. LateShipment.com said consumers and retailers could experience package delivery delays between 14% and 18%.
As if the problems of getting products out to consumers before the Christmas deadline weren’t big enough, however, there’s another logistics challenge ahead.
A CBRE report expects e-commerce sales will reach $234.9 billion this year, but 30% or $70.5 billion of products are also expected to be returned by consumers. CBRE notes a huge cost of the average return to retailers, with reverse logistics costs amounting to 59% of the item’s original sales price.
Amazon aside, most retailers will be relying on third-party logistics providers to handle the surge of product returns post-Christmas.
CBRE projects 2020 holiday returns to be 73% higher than the average over the past five years, mostly due to increased e-commerce activity.
“I do think it’s good news that we’re coming through a COVID period where, again, the supply chain capacity itself is somewhat expanded,” said John Morris, executive managing director of CBRE’s Americas industrial and logistics operation, in a recent webinar releasing the company’s report.
Easier, faster returns for customers are critical in helping retailers get products back into inventory for resale, clearance sales, or disposal.
“The return process for an online order involves several steps that include the cost of pickup handling and many touches as items move back into inventory,” added Matt Walaszek, director of research for CBRE’s industrial and logistics division.
So while it’s beginning to look a lot like Christmas, some of the challenges ahead are unique this year and worth keeping a close eye on into the new year.
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