Report: As E-Commerce Surges, Merchants Need to Fortify Supply Chains

Report: As E-Commerce Surges, Merchants Need to Fortify Supply Chains

Time Stamp: May 23, 2024 12:00 AM
Source Node: 2582165

As the e-commerce industry has continued to expand across the globe, a new report highlights the challenges merchants have faced in keeping up with the surge in demand. 

According to market research company EMarketer, global e-commerce sales are expected to crest the $6 trillion mark in 2024, up from $5.8 trillion in the previous year. It also estimates that just over 20% of all retail sales will be conducted online. With that in mind, UPS Capital surveyed 500 e-commerce merchants as well as 1,000 consumers, highlighting how “businesses that fail to adapt and fortify their supply chains risk being left behind in the wake of this e-commerce revolution.”

Of the merchants UPS Capital spoke to, 45% said that they are currently shipping more than 20% of their e-commerce orders internationally, as 73% of consumers report making online purchases shipped from other countries. Over the last 12 months, 73% of e-commerce merchants saw impacts to their businesses from international shipping problems such as delays, damaged products or theft, primarily stemming from congested overseas ports. 

As e-commerce orders have surged, apparel merchants in particular have run up against problems in managing their warehouses. Half of all apparel merchants surveyed say that physical storage space has been their biggest challenge, followed by quality control assurance capacity at 47%, and inventory stock level gaps at 43%.

E-commerce merchants have struggled with return processes as well, with 49% saying they suspect more than 20% of their returns have been fraudulent. Merchants point to a few different factors that have made it difficult to identify fraud, including the exploitation of lenient return policies, and the pressure to keep customers satisfied.

On the consumer side, counterfeit goods are the chief concern. Roughly 42% say they believe counterfeit products are trending upward, while 23% reported receiving a counterfeit item after ordering the authentic item online.

UPS Capital’s report also identified a gap between the relative shipping speed of many merchants and how fast consumers want their orders to arrive. Around 42% of merchants said that it takes two or more days to have an online order ready to ship, while 46% of consumers expect online orders to arrive within three days.

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