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COVID-19

Retailers get creative to handle expected crush of online sales

Marielle Segarra Nov 13, 2020
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An employee prepares boxes for shipment at a warehouse in Draper, Utah. Retailers are preparing their warehouses for a surge in online orders. George Frey/Getty Images
COVID-19

Retailers get creative to handle expected crush of online sales

Marielle Segarra Nov 13, 2020
Heard on:
An employee prepares boxes for shipment at a warehouse in Draper, Utah. Retailers are preparing their warehouses for a surge in online orders. George Frey/Getty Images
HTML EMBED:
COPY

We’re expecting record online sales this holiday season — Adobe predicts a 33% increase compared to 2019 — and that’s putting stress on retailers that never expected to handle this many packages at their fulfillment centers.

Walmart is converting 42 warehouses that normally ship products to its stores so it can also fulfill online orders.

It’s more complicated than it might sound. If you’re shipping products to stores, you tend to move stuff around in large units — pallets filled with cases of diapers or video games, for example.

“Those distribution centers are built for that physically, in terms of racking and forklifts and carts,” said Mark Lang, who teaches marketing at the University of Tampa.

But at a warehouse that fulfills online orders, “now pickers, they’re pulling individual units off.”

Workers take whatever you ordered — a package of diapers, a couple bars of soap — put it all in a box and load it onto a truck so it can eventually be delivered to you.

To do this, Walmart had to update its computer systems and set aside whole sections of its warehouses.

This is something Walmart can do because it has a lot of warehouses. Bryan Eshelman at AlixPartners said smaller retailers are taking a different approach, one they piloted this spring when the pandemic hit: using their stores to ship online orders.

“They literally put inventory in the aisles — aisles that would normally be reserved for customers — to set up almost like a mini distribution center in the store,” Eshelman said.

Meanwhile, Pepsi, which sells a lot of packaged foods around the holidays, just opened a small, fully automated warehouse outside Chicago, which it said can process orders seven and a half times faster.

COVID-19 Economy FAQs

What do I need to know about tax season this year?

Glad you asked! We have a whole separate FAQ section on that. Some quick hits: The deadline has been extended from April 15 to May 17 for individuals. Also, millions of people received unemployment benefits in 2020 — up to $10,200 of which will now be tax-free for those with an adjusted gross income of less than $150,000. And, for those who filed before the American Rescue Plan passed, simply put, you do not need to file an amended return at the moment. Find answers to the rest of your questions here.

How long will it be until the economy is back to normal?

It feels like things are getting better, more and more people getting vaccinated, more businesses opening, but we’re not entirely out of the woods. To illustrate: two recent pieces of news from the Centers for Disease Control. Item 1: The CDC is extending its tenant eviction moratorium to June 30. Item 2: The cruise industry didn’t get what it wanted — restrictions on sailing from U.S. ports will stay in place until November. Very different issues with different stakes, but both point to the fact that the CDC thinks we still have a ways to go before the pandemic is over, according to Dr. Philip Landrigan, who used to work at the CDC and now teaches at Boston College.

How are those COVID relief payments affecting consumers?

Payments started going out within days of President Joe Biden signing the American Rescue Plan, and that’s been a big shot in the arm for consumers, said John Leer at Morning Consult, which polls Americans every day. “Consumer confidence is really on a tear. They are growing more confident at a faster rate than they have following the prior two stimulus packages.” Leer said this time around the checks are bigger and they’re getting out faster. Now, rising confidence is likely to spark more consumer spending. But Lisa Rowan at Forbes Advisor said it’s not clear how much or how fast.

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