Thursday , November 21, 2024

A New Virus Surge Will Send E-Commerce Volume Soaring Even Beyond Current Levels

With a second wave of the Covid-19 pandemic surging and bringing with it the fear of another nationwide lockdown, merchants can expect to see a minimum 20% to 30% increase in holiday e-commerce sales in 2020, compared to 2019, says ACI Worldwide Inc.

The Naples, Fla.-based payments provider Thursday said global e-commerce volume rose 23% in October 2020 compared to the same period a year earlier, which is in line with its prediction last month that global e-commerce sales would increase 27% in the fourth quarter compared to 2019 as consumers continue to rely on online commerce during the pandemic.

Drivers behind the earlier-than-normal holiday sales rush are merchant concerns about potential shipping delays and lack of staff to fill orders as fears about a second wave of the pandemic grow among employees working on site, says Erika Dietrich, vice president for global risk services at ACI. As a result, merchants are offering holiday deals well ahead of time to entice consumers to start their online holiday shopping sooner.

“Holiday shipping deadlines are being moved up earlier than ever before due to inventory shortages and delays in shipping, and we are seeing more merchants that we work with push holiday deals sooner,” Dietrich says. “Those trends will shift holiday sales up as merchants are realizing they need to motivate consumers to start their holiday shopping earlier.”

Indeed, retail purchases rose 53% in October compared to a year earlier. While holiday sales are starting sooner, Dietrich says overall e-commerce volume will continue to grow during the fourth quarter. Gaming will be a major driver. Gaming volume rose 90% in October from the same period a year earlier. 

Even so, travel and ticketing purchases continue to be hard hit, declining 33% and 79%, respectively in October, compared to a year earlier, ACI says. The declines are being driven by consumers canceling travel arrangements and nixing plans to attend entertainment or sporting events.

Along with the surge in holiday sales, merchants are experiencing a higher rate of non-fraud chargebacks, which jumped 10% in October, compared to the same period in 2019.

Reasons for the spike in non-fraud chargebacks include a backlog of processing returns since employees have been unable to work due to stay-at-home restrictions, safety concerns around opening boxes due to Covid-19, call centers not being staffed for several days in March to answer incoming customer calls, shipment delays, and product back orders.

Shipping delays, for example, are prompting many consumers to return products they no longer have an immediate need for, such as summer clothing that arrived during the fall months, Dietrich says.

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