Ecommerce Briefs: Walmart vs. Jet, FedEx and DHL Enhancements, Product Returns

In”Ecommerce Briefs,” an occasional series, I examine developments and news that affect online merchants. In this setup, I will address Walmart’s attempt to distinguish Jet.com, new ecommerce transport options from FedEx and DHL, merchandise yields, and vacancies at shopping malls.

Jet.com Stumbles

Jet.com declared a re-launch of its site and a modified business plan with a new range of products, new partnerships, and new three-hour and next-day delivery choices. Jet now positions itself as “the shopping destination for city consumers.”

As part of the plan, in October the company announced that it would partner with meal kit supplier Blue Apron to sell an range of kits on Jet.com to clients in New York City, Jersey City, and Hoboken, New Jersey. Customers can get the meal kits through Jet.com’s same-day or next-day delivery offering.

Jet.com’s sales fell by 39 percent on Cyber Monday 2018 compared to 2017. Walmart’s online sales on Cyber Monday climbed 32 percent.

What is the rationale for the shift? Parent company Walmart doesn’t want Jet to compete for Walmart’s online clients who reside in more suburban and rural areas and aren’t as wealthy as Jet’s. But with Walmart improving its own site and adding over 2,000 brands — ranging from kitchenware to outdoor clothes — rivalry and cannibalization are inevitable.

This strategy doesn’t appear to be working. Jet.com’s sales fell by 6 per cent on Thanksgiving Day and Black Friday, followed by a gigantic 39 percent reduction on Cyber Monday compared to the very same times in 2017, according to market research company Edison Trends.

By comparison, Walmart’s online sales on Cyber Monday 2018 climbed 32 percent over this past year. It’s apparent that for products that don’t need to be delivered on the same day, shoppers are only as happy to store on Walmart.com, which provides free two-day delivery on many items for the holidays. Inadequate differentiation exists between both websites.

As for additional multichannel merchants that did well on Cyber Monday, Walmart was joined by Kohl’s with a 42 percent growth in online Cyber Monday sales over 2017 and Nordstrom using a 33 percent gain from Cyber Monday 2017.

FedEx, DHL Enhance Ecommerce Shipping

This month FedEx launched FedEx Extra Hours for clients in restricted U.S. markets. In a statement, a FedEx spokesperson explained,”The vast majority of online orders are placed after 4 p.m., and 64 percent of online shoppers expect orders placed by 5 p.m. to qualify for next-day delivery. FedEx Extra Hours aligns with the requirements of internet shoppers while offering retailers a way to balance stock and reduce shipping costs.” Merchants benefit from an lengthy cut-off period of around eight hours through the night through late pick-ups by FedEx Express.

DHL eCommerce has entered into a partnership with Easyship, a worldwide cloud-based delivery software company, enabling ecommerce merchants utilizing the Easyship software platform to provide same-day and next-day delivery to their clients through the DHL Parcel Metro service. This new capacity went live December 17 for ecommerce merchants in Los Angeles, new york, and Chicago.

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Product Returns

Merchant return procedure influences buying habits. How an internet merchant handles returns greatly influences consumers’ buying behaviour, based on a recently completed survey from Voxware, a supply-chain software supplier. Buyers need both choice and convenience in the returns procedure. Eighty-eight percentage of survey respondents stated that they want the option of returning a product to a physical shop or via a prepaid delivery system. Ninety-five percent said that the simplicity of the return procedure affects their willingness to purchase from that merchant .

Timing of vacation returns. UPS reports that on 2018 National Returns Day (December 19) roughly 1.5 million items were returned, setting a record for the sixth consecutive year. UPS expects another return spike of 1.3 million on January 3.

In past decades, National Returns Day happened in early January and represented the maximum rate of bundle returns for the whole year. UPS features the shift to ecommerce, for example, focus on November earnings and better retail promotions. Free return policies also contribute to the increase. Seventy-nine percentage of ecommerce shoppers surveyed by UPS noted that free shipping on returns is important when choosing a retailer.

Mall Vacancies

Real estate market research firm Reis reported that the third-quarter U.S. mall vacancy rate reach 9.1 percent, the highest percentage since the fourth quarter of 2011. Sears and Bon-Ton department store closings (Bon-Ton liquidated all 256 of its shops ) accounted for much of the increase. Because of this, the third-quarter 2018 average mall lease decreased 0.3 percent in the second quarter to $43.25 per square foot, the first such decline since 2011.

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