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Meeting ecommerce order fulfillment demands during the 2021 holiday rush

By December 2, 2021January 3rd, 2022Articles of Interest, eCommerce Fulfillment

Black Friday, Cyber Monday and beyond: navigating a new 3PL fulfillment world

Black Friday and Cyber Monday are behind us: what did we learn about changing consumer behavior and how will that influence your ecommerce order fulfillment needs and choice of a fulfillment partner this holiday season? Let’s start with the results of the post-Thanksgiving holiday sales rush, the continued issues with the global supply chain—and how these insights can help you better plan to meet your 3PL fulfillment needs during the holidays and beyond.

Online sales lower, in-store sales higher

Black Friday online sales were $8.9 billion, just slightly lower than in 2020, according to Adobe Analytics.1 However, Cyber Monday sales showed a clear decline, totaling $10.7 billion—a drop of 1.4% compared to 2020 performance.2

While the overall ecommerce trend was down, not all online sellers felt the impact. Amazon reported record-breaking sales between Black Friday and Cyber Monday. The ecommerce order fulfillment giant gained 17.7% of total Black Friday sales—more than any other online seller.3 While online sales were relatively flat overall, Amazon continued to take a larger slice of the 3PL fulfillment (pumpkin?) pie after Thanksgiving.

In contrast with the online market, brick-and-mortar store sales increased significantly year over year. This is due in part to 2020’s poor performance, when in-store traffic was down 42.3% compared to 2019.4 Despite the in-store sales increase in 2021, they were still 28% lower than in 2019,5 indicating that consumers aren’t fully ready to walk through the doors of their favorite stores again. Or perhaps the pandemic has so shifted consumer purchasing behavior that physical stores may never see the same level of foot traffic again.

Why did online sales slow down over Thanksgiving?

Americans are shopping for the holidays earlier, rather than waiting for sales deals on Black Friday and Cyber Monday. Retailers helped by offering holiday sales deals well before Thanksgiving. Shoppers also were buying early in fear of shipping delays or retailers running out of products due to supply chain shortages.6

Despite sluggish sales during the traditional, post-Thanksgiving rush, Adobe Analytics anticipates overall online sales will set new records this holiday season overall.7 As a result, retailers will need to balance rising 3PL fulfillment orders with the reality of a less-reliable global supply chain.

Why do shipping delays continue?

In years past, America’s holiday shoppers have relied on—perhaps even taken for granted—the ability of the global supply chain to deliver products on time to their favorite stores. But in 2021, supply chain disruptions around the world are delaying some shipments by weeks or more.8 As a result, the global supply chain is struggling to put gifts on the shelves for consumers to buy.

Several factors are weakening what was once considered an unbreakable global supply chain. First, consider the backlog of container ships waiting to unload, because there aren’t enough dock workers available. At the beginning of December, about 500,000 containers of gifts from across Asia were standing by unloaded at the ports of Long Beach and Los Angeles.

Next, add the shortage of truck drivers to take products from the docks to 3PL fulfillment centers and retail stores. Making a bad situation even worse are the railroad terminals jammed with containers waiting to be transported to their final destinations. This congestion makes it difficult for trains to enter the terminals and pick up the containers. Once they’re finally delivered, a nationwide shortage of warehouse workers delays processing the deliveries for final shipment to stores or consumers’ homes.9

At the root of these supply chain challenges is COVID-19, which disrupts the supply chain from end to end. We’ve been discussing shipping disruptions. But first, you need products to ship—and the pandemic stands in the way, creating factory worker shortages in many countries that supply American consumers with goods, including Thailand, Malaysia and Vietnam. For those goods that are produced, there’s even a shortage of cardboard boxes to pack them for shipping.10

Speaking of COVID-19, there’s one more issue that threatens to slow down delivery of holiday gifts: the healthcare system itself. The Health Industry Distributors Association (HIDA)—which represents nearly 120 distributors in the U.S. healthcare supply chain—is advocating that medical supplies should take priority over all other items waiting in containers offshore. According to HIDA, these life-saving supplies destined for hospitals and other healthcare sites are being delayed an average of 38 days, and HIDA is saying hospitals shouldn’t have to “wait in line” during a public health emergency. As a result, HIDA is recommending that the White House approve a “fast-pass” system for healthcare products. The volume—and its impact on the supply chain—are substantial: in 2020, HIDA distributors delivered 51 billion gloves, masks and other personal protective gear.11

Put it all in perspective, and the bottom-line advice is to shop and ship early—and consumers are listening.The U.S. Postal Service is delaying deliveries to lower costs, and small parcel carriers are recommending ship-by dates well before Christmas for its most economical service. For example, the FedEx® deadline for ground economy shipping is December 9.12

FedEx® said it could meet holiday delivery deadlines as long as it has enough workers to do the job. “The lack of employees… partially because of the Delta variant and partially because of the stimulus… (has) created a lot of employment issues.” The CEO noted the increase in number of employee applications is “very encouraging.”13

Overcoming the 3PL fulfillment challenge

To help our clients meet ecommerce order fulfillment demands this holiday season and beyond, we launched TAGG Peak Prep earlier this year. The goal: to proactively help customers plan and anticipate order volume spikes and prepare their order fulfillment operations to handle whatever might come.

And that’s the point: no one can predict with any accuracy what’s next with the pandemic, state of the global supply chain or how it all will impact consumer shopping behavior. But you can plan. As your fulfillment partner, TAGG is here to help you take Your Business EverywhereSM during the 2021 holiday season and beyond. TAGG Peak Prep is one way we’re doing just that. To learn more, contact us today.

Contact TAGG Today

[1]cnbc.com. “Amazon touts record post-Thanksgiving sales amid lackluster Black Friday, Cyber Monday for retailers.” November 30, 2021.
[2]cnbc.com. “Amazon touts record post-Thanksgiving sales amid lackluster Black Friday, Cyber Monday for retailers.” November 30, 2021.
[3]cnbc.com. “Amazon touts record post-Thanksgiving sales amid lackluster Black Friday, Cyber Monday for retailers.” November 30, 2021.
[4]Financesonline. “67 Remarkable Cyber Monday Statistics: 2021 Shopping Data & Consumer Behavior.”
[5]cnbc.com. “Amazon touts record post-Thanksgiving sales amid lackluster Black Friday, Cyber Monday for retailers.” November 30, 2021.
[6]cnbc.com. “Amazon touts record post-Thanksgiving sales amid lackluster Black Friday, Cyber Monday for retailers.” November 30, 2021.
[7]cnbc.com. “Amazon touts record post-Thanksgiving sales amid lackluster Black Friday, Cyber Monday for retailers.” November 30, 2021.
[8]Forbes.com. “Supply Chain Issues Have Upended 2021 Holiday Shopping. Here’s What the Latest Data Says About How Consumers Are Adjusting.” November 10, 2021.
[9]cbslocal.com. “Supply Chain Issues: How Are Global Shortages Affecting Local Customers?” November 30, 2021.
[10]Businessinsider.com. “Yes, the supply chain is an issue. No, it’s not going to ruin Christmas.” November 4, 2021.
[11] Health Industry Distributors Association. December 1, 2021.
[12]cbsnews.com. “FedEx, UPS and USPS holiday shipping deadlines are out.” October 12, 2021.
[13]cbsnews.com. “FedEx CEO says company can meet holiday demand amid staffing and supply chain issues.” November 7, 2021.