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Amidst a Global Recession, Ecommerce is Growing

Categories: BCO/Shipper.

The COVID-19 pandemic has created two very distinct spheres in the global economy.

In the first sphere, shutdowns have flatlined revenue, and led to massive furloughs, layoffs, and business failures. Much of the world has plunged into a recession that may not improve until the end of 2020 (or later).

Bankruptcies in industries with large vendor networks — department stores, hotel chains, and rental car companies, for starters — could soon impact manufacturers, fabricators, and logistics firms. Some estimates predict that 75% of independent restaurants will get wiped out.

However, elsewhere in the economy, middling startups are turning into powerhouses overnight as consumer buying practices become increasingly touchless, on-demand, and deliverable. Farm boxes and grocery delivery are suddenly in vogue, and ecommerce is thriving by most estimates. Shipyards are still processing cargo without delay — though less than usual.

So, what’s going to happen to ecommerce as we know it? Reading the economic trade winds, here’s what we can say with confidence:

Ecommerce isn’t going anywhere

People are more cost-conscious during a recession, but most won’t stop buying altogether. The money continues to flow, but its trajectory has changed.

Online shopping was popular before the pandemic. It’s now the primary option for many consumers. Even as states push to alleviate restrictions on in-person commerce, wary consumers are taking a “wait and see” approach to frequenting brick-and-mortar stores.

Many of these temporary changes will turn into habits that could transform retail in the coming months, even when the pandemic begins to wane.

Companies that can maintain a robust supply chain, keep stock available online, and adapt to evolving local conditions will be rewarded handsomely.

Uncertainty drives innovation

Anticipating customer wants is only part of the equation — companies need to prepare for externalities that could impact the supply chain, too.

In a lot of places, curbside pickup will define the retail landscape in the coming weeks and months. This puts companies that don’t have robust ecommerce platforms in place at a distinct disadvantage.

Many small to mid-size businesses aren’t prepared to manage ship-from-store fulfillment and inventory management for in-store pickup. How those companies fill the gap will define their success.

Rapid changes in consumer behavior could lead to new trends in shipping and logistics as well. For example, ecommerce sales in home goods, including furniture and appliances, are growing as consumers spend a lot more time at home. If increasing load rates or localized driver shortages impact last-mile costs, many retailers may need to shift orders to 3PL fulfillment partners and freight forwarders in order to avoid prohibitive delays and costs.

How ecommerce retailers can respond to the new retail climate

The shifting state of retail means that for the vast majority of businesses, “business as usual” won’t cut it anymore. Here are a few tips for ecommerce retailers to keep customers happy and ease strain for the foreseeable future:

Prepare for peaks and valleys

Ecommerce retailers who sell high-demand products should be prepared for unexpected spikes in demand that can prove overwhelming for existing fulfillment partners. For example, while many consumers likely have enough toilet paper to get them through the next pandemic event, other home cleaning and safety products may fly off the shelves at a moment’s notice.

Many retailers are anticipating stock for high-demand products by partnering with flexible, portside 3PL warehouses. This option is especially valuable for brick-and-mortar stores with limited warehousing capacity, or ecommerce retailers who aren’t equipped to handle high-volume, next-day fulfillment cycles.

Transparency will win the day

Communicate honestly with your customers about possible shipping delays and product shortages due to high order volume.

Keep shipping estimates up to date on your consumer facing sales portals, emails, and automated notifications. Many retailers are updating their website with a banner informing customers that, yes, they’re open, but may be experiencing some delays. This frankness about the current situation is welcomed by most buyers.

Despite high expectations for shipping speed, many customers are comfortable with waiting a little longer when companies are transparent about potential delays from the beginning.

Call in reinforcements

When demand spikes, ecommerce companies have two options: scale up operations temporarily or seek out a fulfillment solution to fill the gap.

Both options have benefits. Scaling up keeps operations in house, but requires more material investment in staffing and infrastructure. Upscaling can’t quickly compensate for spikes in demand, and it will likely require downsizing when the rush is over.

Alternately, taking on a 3PL fulfillment partner involves handing some responsibilities over to a third party — but the payoff is improved flexibility, better speed and efficiency, and streamlined, hands-off fulfillment. 3PL warehousing and fulfillment manages stock off-site with expert cargo tracking to ensure customers get their product quickly and with unmatched transparency.


For many ecommerce retailers, industry growth is good news — it means they’ll stay afloat or even grow during these tough economic times.

With rapid growth, however, comes a lot of competition. In order to stay ahead, you need to exceed customer expectations with regards to quality and service.

To bolster your existing fulfillment apparatus, consider working with an experienced 3PL partner who can rapidly compensate for shifts in demand to manage shipping, restocking, and returns faster.

Talk to the experts at GlobeCon about your ecommerce warehousing and fulfillment options.