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The weekly dispatch: Peak season surcharges are coming…

After reading the title you’re probably thinking: Is peak season really here already!? According to FedEx, September is the new start to the holiday season – at least where parcel is concerned. Also learn about the growing importance of omnichannel and how TikTok is beating Google at its own game in this week’s dispatch:

Walmart acquires Volt Systems to power up omnichannel shopping

Walmart has announced it’s acquiring Volt Systems1, a software solution that enables detailed inventory forecasting and real-time visibility into product assortments. 

This latest acquisition gives Walmart a solid competitive edge over its e-commerce-based rival Amazon. With expertise in high-volume D2C fulfillment coupled with a vast store network, Walmart is now better placed to offer consumers a full suite of hybrid fulfillment services with greater accuracy, from curbside pick-up to in-store returns, in addition to home delivery. 

Informed by pandemic shopping experiences, expectations for omnichannel shopping capabilities are at an all-time high. According to Shopify’s Future of Retail report2 for 2022, 54% of consumers say they’re likely to look at a product online and visit a store location, while 53% are likely to look at a product in-store and buy it online later.  By investing in its omnichannel services, Walmart is setting itself up for a fundamental shift in consumer buying behavior.

E-commerce is growing (with a lot of help from the storefront)

E-commerce growth may have slowed down with the resurgence of in-store shopping, but stats show that it would be unwise to discount online shopping entirely. The latest research from Forrester Research3 Inc. forecasts that ecommerce sales will reach $1.6 trillion in 2022 and grow at a 10% CAGR until 2027.

This marks a return to pre-COVID-19 growth projections, after 2020 and 2021 saw a surge in activity due to consumers switching from brick and mortar to online shopping. However, these new projections shouldn’t be judged at face value. 

The growing popularity of BOPIS (Buy Online, Pick-Up In-Store)4 and curbside pick-up is making the storefront more relevant than ever in the battle to secure customers online. By 2027, Forrester also forecasts that BOPIS will represent 13% of all U.S. online retail sales5 –  a tidy sum that retailers will be losing if they don’t start investing in their clicks to bricks strategy.

TikTok takes on Google in the world of search

TikTok might not be considered a reliable source of information to many, but the social media giant is now taking steps to improve its search engine6 to provide more relevant results.

This new feature, currently being tested among a small group of users, flags comments and links that contain search terms, making it easier for people to find specific products, brands, or hashtags.

This new feature comes as research demonstrates how TikTok has become a legitimate search engine in the eyes of Gen Z consumers. 40% of Gen Z7 report preferring apps like TikTok and Instagram over Google – in part because these platforms aren’t designed to find the most optimized results. 

A TikTok user looking for a new recipe, for example, isn’t forced to wade through a giant blog post to find instructions but is presented with a concise, engaging video telling them exactly what they need to know. As the preference grows for immersive, visual search content, Google has a lot of catching up to do if it’s going to attract Gen Z consumers.

Holiday season (surcharges) are getting earlier every year

FedEx has just announced its peak season surcharge schedule for 20228 – and shippers are not going to be happy.

Despite peak season parcel volumes set to drop from the highs seen in 2020 and 2021, FedEx isn’t shying away from additional fees, citing that high residential delivery volumes make surcharges necessary to maintain service levels. 

Just like last year, large-volume shippers9 who are shipping more packages during peak will see the biggest surcharges. Moreover, 2022 peak season surcharges kick in at some of the earliest dates on record, with some surcharges starting on September 5th. Surcharges on additional handling and oversized packages have also been adjusted according to specific ranges, with parcels shipped during the so-called ‘peak of the peak’ receiving the biggest charges.

Avoiding the worst of this new surcharge structure will require shippers to incentivize earlier order placement by their customers, squeezing shipping and delivery into the early peak season rather than the main event. Check out our peak season surcharges guide for more information on how seasonal surcharges work.10

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