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e-commerce businesses is that the industry is booming. According to the Census Bureau of the Department of Commerce1, the second quarter of 2022 saw U.S. retail e-commerce sales of $257.3 billion, a jump of 2.7% from the previous quarter. Insider Intelligence predicts2 that 21.8% of all retail sales will take place online by 2024—up from 20.4% in 2022.
But with this growth in online shopping comes increased competition, among other challenges.Find out what challenges may await e-commerce professionals in the year ahead and what you can do to help you stand out from the competition and reap the benefits of the sector’s growth.
The rising cost of fulfillment
Even if demand has the role of content for b2b strategies and seo
increased for many e-commerce brands, getting products to customers has become increasingly difficult and expensive over the last few years. And in a recent Saddle Creek Logistics survey3, 51% of respondents said that fulfillment costs increased somewhat or significantly in 2022.
Many factors are to blame for the rising cost of fulfillment—starting with the highest inflation rate4 that the U.S. has experienced in 40 years, which peaked at 9.1% in June.
The far-reaching effects of the COVID-19 pandemic can’t be ignored either. The National Bureau of Economic Research5 estimates that COVID-19-related illnesses have reduced the American labor force by some 500,000 people. Specifically, the ongoing shortage of truck drivers6 and the high wages they are demanding are also contributing factors to increases in shipping costs.
Tip: Minimize shipping costs by getting creative and updating your technology
While you can’t stop egypt data major world events, there are steps that you may take to minimize your shipping costs.
The most obvious one is increasing product prices to account for the increased cost of shipping them out, similar to Amazon’s fuel and inflation surcharge.
Allow online shoppers to pick up purchased items themselves via locker collection or click-and-collect options from physical locations. Customers often prefer the option of driving to a close location and picking up an order rather than having to make sure they’ll be home when the package is due to arrive.
Target’s store-centered fulfillment strategy7 resulted in a 30% decrease in digital fulfillment costs.Retail and shipping experts8 believe that parcel locker options are increasingly cost-effective in suburban areas, where drivers might have to drive miles between delivery locations.