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Online sales are set to surge at an unprecedented rate this holiday season as shoppers avoid stores and buy online in droves

Nov 3, 2020, 00:28 IST
Business Insider
Justin Sullivan/Getty Images
  • Online sales are expected to grow at an unprecedented rate this holiday season, according to eMarketer data.
  • During November and December, online shopping is expected to rise 35.8% this year, making up $190.47 billion of the total $1.013 trillion analysts predict will be spent on holiday shopping this year.
  • In-store sales are expected to drop 4.7%, eMarketer found.
  • The surge in online shopping is leading industry experts to warn of a "shipageddon" where retailers and shipping companies will be unable to keep up with demand and packages will be delayed.
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Shoppers are expected to turn to online shopping at unprecedented levels this holiday season as the coronavirus pandemic continues to keep people at home.

The retail industry is preparing for an unusual holiday season overall: Shoppers may buy different products to accommodate their new normal, and they may have less money to spend as a higher number of people face long-term unemployment.

But perhaps the most notable shift will be in terms of how people are shopping — namely, online rather than in stores.

According to analysis from eMarketer, online shopping is expected to grow 35.8% this year, making up $190.47 billion of the total $1.013 trillion analysts predict will be spent on holiday shopping this year. By comparison, in-store sales are expected to drop 4.7%.

"This holiday season will see a continuation of the channel-shift to ecommerce, as shoppers look to avoid crowds and minimize their number of in-person shopping trips," Andrew Lipsman, eMarketer principal analyst at Insider Intelligence, said in a recent report.

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The Centers for Disease Control and Prevention has classified shopping in crowded stores during the holiday season as a high-risk activity when it comes to spreading the coronavirus. That means retailers will likely do away with enticing in-store deals or sales in order to avoid hordes of customers showing up in person, and will embrace safer alternatives like curbside pick-up.

But online shopping is still expected to be the first choice for shoppers, leading to a growing concern over a holiday "shipageddon" as retailers and shipping companies try to keep up with the surge. Shipping companies are warning that they are already out of capacity ahead of the holidays, and industry experts warn that packages will likely be delayed.

ShipMatrix, a software company that tracks shipping data, recently told the Wall Street Journal it estimates that 86.3 million packages will be looking for space between Thanksgiving and Christmas, but that the shipping industry's total capacity will be 79.1 million parcels per day. That means there will be an excess of about 7 million packages per day that the industry doesn't have the capacity to ship.

"Consumers should be prepared for deliveries to take extra days no matter which carrier is delivering their parcels," Satish Jindel, president of ShipMatrix, told the Journal.

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