Shipping to P.O. Boxes: Is it a No? Or Is it a Go?

Shippo Snippets: Shipping to a P.O. box presents a range of benefits and drawbacks for merchants and consumers alike P.O. boxes can often be managed online USPS’s MTC SA service can provide P.O. box users with an actual street address From convenience to cost, carrier specifications, security, pri...

How to Send a Prepaid Return Shipping Label via USPS

According to a UPS report, 34 percent of customers want to see a prepaid return shipping label in the box.  Putting the shipping label in the box makes it much easier for customers to return the item, since they don’t have to figure out how to create a shipping label in order to mail back…

Brand Matters: How You Can Stand Out and Beat the Competition

So you have an e-commerce business. You’re passionate about your product, excited to get it to your customers and grow your business. But, like so many merchants in 2020, you’re wary of intense competition. Almost anything a consumer could possibly want is available at the tap of a finge...

Using Packaging to Boost Your Brand and Gain a Competitive Advantage

Shippo Snippets: Keeping your brand packaging design consistent with your marketing efforts will help your customers become familiar with your product so they can easily identify it in the future Ultimately, your customer should be able to “read” your shipping packaging at just a mere glance The...
E-commerce News and Insights | Jul 20, 2020

The Delivery Roundup, Volume 2

The Delivery Roundup, Volume 2

Welcome to Volume 2 of The Delivery Roundup—our no-BS, straightforward collection and analysis of the latest happenings in the world of e-commerce.

This time around, we’re talking re-opening (and re-closing) and it’s impact on commerce, Walmart’s new Amazon Prime competitor, USPS challenges, new and potentially historic legal protection for DTC brands against unauthorized resale, and much more.

So, we’re not reopening?

Despite optimism for a return to “normal,” many states find themselves pumping the breaks following spikes in COVID-19 cases. As of today, roughly half of all states are either pausing their reopening efforts or even proactively increasing additional restrictions.

map of reopenings

And what does this mean for e-commerce? Amid these challenging times, e-commerce has been a rare bright spot, both for businesses and consumers. With physical retail options either off-limits or limited, businesses, both old and new, have doubled down on e-commerce. Consumers, whether driven by restrictions in their areas, protecting their own health, or both, have shifted more and more of their business online.

reopening chart

Looking at e-commerce order volume (based on Shippo’s network of over 50k active merchants), the beginning of shelter-in-place orders led to an expected, but significant increase in e-commerce volume.

As more physical retail businesses started to re-open, we saw e-commerce volumes dip slightly, but still remain far above pre-COVID levels. As you may have expected, in June, physical retail volume saw it’s best month since the start of the pandemic, with a 7.5% rise in sales.

However, physical retail’s comeback may be short-lived. With more states reversing their reopening plans amid spikes in COVID-19, more of the total commerce pie is shifting back online. During the first week of July, coinciding with several states’ decisions to slow or reverse reopenings, we saw the highest weekly volume of e-commerce orders since May.

What this means for your business → E-commerce levels remain at record highs, but retaining new customers should be a priority. If you can successfully deliver a memorable customer experience, new customers are far more likely to stick around, even when they have more options to choose from. However, if you’re merely filling a temporary transaction void, you may see your volume drop off just as fast as it spikes. For more details on how you can emphasize customer retention, we wrote some words about this recently.


Walmart prepares to launch Amazon Prime Walmart+. There might be room in consumers’ lives for both.

The $98 per year subscription service will offer free same-day delivery on groceries and general merchandise, discounts on fuel at Walmart gas stations, and early access to various product deals.

So, will it dethrone Amazon Prime? Almost certainly, no. With a 15-year head start, penetration into 50+% of US households, and an established e-commerce infrastructure, Amazon remains far ahead of Walmart in the e-commerce race.
Even though Walmart won’t overtake Amazon’s overall dominance, they can compete and even win in certain areas. Most notably, essential household goods and groceries.

Even with the acquisition of Whole Foods, Amazon is still at a large disadvantage when it comes to grocery and essential goods, both online and off. For every Whole Foods location in the United States, there are 10 Walmarts. Furthermore, Walmart already holds the title of the largest market share for U.S. grocery sales at 21%, compared to just over 2% for Whole Foods. Meanwhile, Amazon is expanding the availability of its Amazon Fresh program, though it has a ways to go to match Walmart’s reach.

E-grocery has been growing steadily now for years. At the start of 2020, online sales accounted for roughly 10% of all grocery sales, up from just 3.8% in 2017. Analysts predicted that by 2022 70% of U.S. shoppers will make online grocery purchases. And this was pre-COVID-19.

Like almost all things online, COVID-19 has significantly accelerated the shift from retail grocery shopping to e-grocery, with April 2020 sales reaching a record high of $5.3B from over 40 million unique shoppers.

As grocery shopping, either through curbside pickup or delivery, continues to move online, Walmart is well equipped to dominate the space. Walmart’s decision to anchor their new program around same-day access grocery and household goods looks to be a smart move.

With their current dominance in e-grocery coupled with the unique value add of discounted fuel for Walmart+ subscribers, I wouldn’t be surprised to see consumers leveraging both Amazon Prime and Walmart+ simultaneously for different needs.


USPS’s financial woes: Should you be concerned?

The plight of the Postal Service shouldn’t be a surprise to anyone in the e-commerce space by now.

But, exactly what is going on, what will happen, and how it will impact your business are questions that often lack clear answers.

First, the main challenge facing the USPS is the steady decline of letter mail. This has been an ongoing trend for many years. So, nothing new. However, this decline has accelerated significantly amid COVID-19 with drops nearing 50% for Marketing Mail. Significant growth in package shipments hasn’t been enough to compensate.

Recently, the USPS’s new Postmaster General reportedly established some potential cost-saving policies to combat its financial woes. The Washington Post reported this week that measures including axing certain trips and avoiding overtime work could lead to delays.

As of today, Shippo has not seen any meaningful degradations in speed across First-Class Package Service, Priority Mail, or Priority Mail Express. We’ll keep an eye on how things evolve, but currently, there is no statistical indication of slowdowns… and we hope it stays this way.

For now, the USPS remains a high-value and reliable option for most US-based businesses.

Speculation also exists around potential price increases on popular package shipment services, though nothing has been confirmed. Meanwhile, the top private carriers are making investments in expanding their networks and offering cost-effective solutions for small businesses.

In good news for the USPS and US-based businesses, the USPS has started charging other national carriers more for cross-border shipments. This means more revenue for the USPS and higher costs for foreign businesses that are trying to undercut US-based businesses.


New litigation may provide brands with greater protection against unauthorized third-party sales on Amazon.

For many DTC brands, exclusive distribution and full control over customer experience and interactions are critical pieces of their strategies. This explains why many brands have historically been wary of working with Amazon and why many have pulled out of selling on Amazon entirely.

However, brands have historically struggled to combat unauthorized resale of their products by third parties on marketplaces like Amazon. According to Forbes, “such resale has been allowed under the First Sale Doctrine. This law doesn’t give copyright or trademark owners control over lawfully-made products once they are sold on, even if that sale is not authorized by the copyright or trademark owner.”

A new, and potentially historic trademark case, could result in brands taking back control. “The only way you can stop someone from selling a trademarked item after the first sale is if the product is ‘materially different,’” per attorney Milton Springut, who specializes in trademark, copyright, and patent litigation.

Josie Maran Cosmetics, in its recent legal claim, is arguing that the defendant, Morning Beauty, is in fact selling a “materially different” form of Josie Maran’s products. Specifically, that Josie Maran’s warranty policy clearly stipulates that it will not honor the product warranty for goods bought from an unauthorized channel or seller.

If Josie Maran is successful, this could create a new precedent that other brands can use to stop the unauthorized sale of their goods on Amazon and other marketplaces.


Major internet players continue to lean into e-commerce.

Hot on the heels of its update to include more non-paid placements in its product knowledge panel, this week, Google announced a new mobile video shipping platform.

Shoploop, the new Google project, aims to capitalize on shifting consumer behavior. Knowing that many consumers leverage social media in combination with store sites to make purchases (for example, you may be browsing an item on a store and then flip over to YouTube to watch a review), Shoploop aims to merge the experiences more seamlessly.

Shoppers will be able to scroll through 90-second, interactive videos to evaluate products and make purchases natively.

Google is clearly leaning in on video for e-commerce. Remember, YouTube recently launched interactive video ads for e-commerce brands.

Rival giant, Facebook, also has more news this week specific to e-commerce. Following their expansion of Instagram and Facebook Shops, WhatsApp, another FB-owned platform, added QR code support for businesses.

Businesses can provide consumers with QR codes for direct access to chat. As brands seek to build deeper relationships with their customers, for those with enough resources to support one-to-one interactions, this feature could help bridge the distance. Unfortunately for WhatsApp, this announcement was followed later in the week by a temporary outage of their service.


That’s all for this round. Be on the lookout for The Delivery Roundup, Volume 3 in the near future, and be sure to share any tips and feedback!

Happy shipping!

Mario

Mario Paganini likes running and eating vegetables. Works at Shippo.

Get Started Today for Free

Everything you need for professional-grade shipping + deep discounts from top carriers.
Sign Up Free