Small and medium-sized businesses rely on ecommerce for international growth, FedEx study

FedEx Corp.’s Small Business Trade Index data shows that the growth of ecommerce is vital to U.S. small and medium-sized businesses (SMBs).

More than 90% of the 1,000 SMBs said ecommerce platforms have been key to facilitating global trade. At the same time, 86% say global trade has been an important growth driver for their businesses. The FedEx small business trade index also confirmed that U.S. small business decision-makers face additional challenges, with the majority reporting shipping delays or disruptions due to geopolitical issues as a main barrier (84%).

More than two-thirds of U.S. small business executives rely on imported goods for production or as merchandise to distribute domestically. These businesses report they export products that utilize imported materials, and 82% say the ability to import products or components from overseas directly supports jobs within their company.

Most of the business leaders report that compared to 10 years ago, they are more likely to believe global trade stimulates growth, creates jobs and fosters innovation. They also recognize the importance of retraining or reskilling individuals impacted by increased trade. An overwhelming majority (95%) support prioritizing job retraining and upgrading skills among workers to help the U.S. compete globally.

FedEx is a shipping carrier for 478 retailers.

Morning Consult conducted the survey for the FedEx Small Business Trade Index between Feb. 14 and 24, 2024. It asked SMB leaders about their perceptions of the economy and trade. It also analyzed how technology and other trade policies impact U.S. business growth.

86% of small business decision-makers credit ecommerce platforms for fueling global trade, propelling business growth, according to FedEx and Morning Consult data.

Similarly, 64% of decision-makers at these companies said they “lean on” ecommerce platforms such as Shopify to grow their businesses internationally. And 60% said online marketplaces including Amazon, Mercado Libre and Alibaba help them grow.

At the same time, three-quarters (75%) of these businesses consider the cost of an international ecommerce consultant to be a challenge. More specifically, 45% consider it a minor challenge and 30% a major challenge.

95% of SMBs said Japan is “very important” or “somewhat important” for the U.S. to maintain trade with, and 91% said the same about the U.K. After that, the countries these SMBs considered most important for trade were: China (89%), Germany (88%), India (87%), South Korea (83%), Brazil (81%), Kenya (66%).

Other key findings are:

  • 91% recognize the pivotal role of technology in driving economic growth and fostering international collaboration.
  • 86% consider selling goods internationally to be important to the growth of the business
  • 84% pinpoint shipping delays and 83% highlight import/export fees as major hurdles. They emphasize the need to navigate complex trade landscapes effectively.

Sellers of wine and spirits receive many new B2B services

Provi, a B2B online marketplace featuring more than 1,400 alcoholic beverage distributors, has launched new services to streamline retail chains’ often complex purchasing needs.

At the end of February 2024, the marketplace company introduced enhanced enterprise management and procurement software and services, including a revamped way for retail chains to manage corporate approval of purchasing and expanded capabilities to punch out from procurement software to order from distributors’ online catalogs.

Provi said it launched EDI support tailored specifically for distributors operating at scale to better accommodate retail chains placing orders through electronic data interchange.

In order to improve the way retail chains manage orders for all their locations, Provi introduced an upgraded approval queue designed to let chains’ regional procurement managers use a single computer interface to view and act on product requests from multiple retail store locations. At the same time, the approval queue provides corporate executives with a centralized view of their national beverage purchasing program as sourced from various distributors.

Taylor Frendahl, director of strategic sourcing at restaurant chain P.F. Chang’s, said in a Provi press release that the consolidated approval feature had proven to be a true game-changer for their company. He added that the capability to approve, reject and monitor all orders across multiple locations in one comprehensive view had enhanced efficiency and streamlined decision-making processes.

Provi says that its new EDI support “facilitates the direct flow of order data to distributors’ enterprise resource planning systems, offering enhanced visibility into post-order changes, delivery dates and critical information between chains and their distributors.”

Going forward, Provi plans to support “split mandates,” which will let chains establish corporate beverage purchasing programs while also granting each store location autonomy in their beer and wine selections to address local demand.

Wix also launches localized features

Wix is a website builder, that also provides ecommerce software. Merchants can create an online store with a drag-and-drop system. It has partnered with Global-e, a cross-border software solution, to extend its ecommerce platform.

Through the partnership, Wix users can expand their businesses by using Global-e’s cross-border functionalities. The software will now include pricing and payments in over 100 currencies. This enables customers to buy in their local currency.

Additionally, merchants can set up payment methods, a checkout process, shipping options and language translation per market. Pricing can also be adjusted to regional markets. Sellers can also use an end-to-end international logistics solution, to improve their cross-border operations. Global-e’s data models will also be added to the software, which will give merchants insights to optimize their global offering.

Oren Inditzky, VP of Online Stores at Wix said that they are committed to empowering their merchants to grow their business in the global marketplace and provide them with the tools they need for streamlined international expansion. The collaboration with Global-e removes the complications involved in selling online internationally, enabling Wix merchants to maximize their reach globally, breaking down barriers to international commerce.

The news of this collaboration comes a few weeks after Wix’s competitor Shopify also launched features that help merchants set up localized online stores. Cross-border ecommerce continues to grow, so it is  only natural that software providers want to offer these features to sellers.

 

U.S. consumers prefer online marketplaces over retailers’ websites, Temu online shopping survey finds

Shoppers want to be able to find a wide variety of products in one place, findings from a Temu online shopping survey show.

The results, which Temu released this week, are based on a survey it commissioned from Propeller Insights of more than 1,000 U.S. adults, aged 18 to 65. Propeller Insights conducted the survey in December 2023. This is the first survey Temu has released looking at the U.S. market.

Temu is owned by Pinduoduo which operates an app-only marketplace for Chinese consumers.

Consistent with findings from several Digital Commerce 360 consumer-insight surveys, Temu found that price is the top factor for nearly two-thirds of respondents (63.9%).

After price, product quality and delivery speed were the most important factors influencing consumers’ purchasing decisions, the data showed. Lower on the priority list were the brand’s reputation, online security and sustainability efforts, the spokesperson said.

78.4% of respondents said they compare prices online before purchasing products. Nearly three-quarters (73%) said they believe they get better deals online than in physical stores, and they prefer to shop online.

Online marketplaces, which sell a vast range of products, are now more popular than individual retail brand websites, Temu said in a report.

During the 2023 holiday season, just over a quarter (25.7%) of surveyed consumers shopped at online marketplaces. In comparison, a fifth (20%) shopped directly on retailers’ websites.

More than three-quarters of respondents (75.2%) said they are savvy enough to know which websites are safe and trustworthy to buy from. Nearly three-quarters (73.3%) said they read customer reviews to help determine if an ecommerce site is trustworthy, according to the Temu online shopping survey.

Social media also has an important impact on consumer selection of online shopping sites, Temu said in the report. It added that “every age demographic learned about Temu primarily through social media.”

When it comes to spending behavior, consumers make purchases out of personal interest rather than being influenced by what they see on social media, the Temu spokesperson said.

53.4% of respondents report not being influenced to buy something based on seeing someone else own it, the spokesperson said. And 53.9% will still make a purchase even if their peers advise them against it, the spokesperson added.

Temu researchers didn’t obtain any data on which social media platforms are most popular for online shopping, but they did find out which online shopping platforms were most popular. Some of the top platforms that U.S. consumers preferred included Amazon, Target, and eBay.”

Investor money for B2B marketplaces slows in 2023

Funding for B2B marketplaces dropped significantly in 2023, totaling $700 million compared to more than $2 billion in 2022, according to Applico LLC’s third annual B2B marketplace rankings. In addition to less venture capital fueling B2B marketplace investment, the number of deals reached a five-year low, totaling just 23 for 2023, a 40% dip from the previous year.

According to the report, there are a few notable names from the 2023 list that close their doors while others, like Indigo Ag, made big pivots and raised at a 94% discount compared to its prior $3.5B valuation.

One marketplace that received funding is Faire, which connects independent retailers with emerging brands. Last September, Shopify Inc. invested an undisclosed sum in Faire as part of a partnership in which the marketplace would adopt Shopify technology for its clients. At the time, Faire, which was founded in 2017, was valued at $12.5 billion. Faire occupies the top spot in Applico rankings for B2B marketplaces.

At the time the deal was announced, Shopify’s director of product Aneeqa Khan, said the partnership would make it easy for Shopify merchants to find wholesale buyers and enable retailers to source from Faire’s network of brands.

The United States is Faire’s biggest market, while Europe is its fastest-growing market. Faire launched in 15 European countries in 2021. Faire, which focuses on independent businesses, says that its marketplace offers small retailers, many of which are looking to source less widely available products, a way to differentiate themselves online and offline.

Another trend to emerge is the continued convergence of software-as-a-service-based technology into B2B marketplaces platforms, according to Applico. For example, Acculynx, which ranks number two on Applico’s list of B2B marketplaces, started out as a provider of a SaaS-based business management app for roofing contractors. Acculynx evolved into a B2B marketplace “after building a dominant market position on the demand side,” and eventually “began charging a take rate to distributors,” according to the report. It is the first time Acculynx has appeared in Applico’s rankings,

Third-ranked GrubMarket Inc. is another marketplace embracing SaaS technology. GrubMarket initially began as a B2B marketplace and then added a SaaS product to lock in buyers and generate recurring revenue.

Rounding out the Top 10 in Applico’s rankings are Joor (#4), another SaaS company that built an online B2B Marketplace, Farmer’s Business Network (#5), Leaflink (#6), Vetcove Inc. (#7), Partstrader (#8), Provi Inc. (#9), and Material Bank (#10).

UPS will cut 12,000 jobs to save money in 2024

UPS revenue declined in Q4 and 2023. The carrier says the planned job cuts will generate $1 billion in savings in 2024.

United Parcel Service Inc. (UPS) will cut 12,000 jobs this year, the carrier announced Jan. 30. That’s part of a plan to generate $1 billion in savings as revenue and package volume decline, CEO Carol Tome said.

UPS consolidated revenue declined 7.8% to $24.9 billion in its fiscal fourth quarter ended Dec. 31. Consolidated operating profit declined 22.5% during the same time period to $2.5 billion. For the full fiscal 2023 year, consolidated revenue declined 9.3% to $91 billion and consolidated operating profit declined 28.7% to $9.1 billion.

2023 was a unique and quite candidly a difficult and disappointing year for UPS. “We experienced declines in volume, revenue, and operating profit in all three of our business segments. Some of this performance was due to the macroenvironment and some of it was due to the disruption associated with our labor contract negotiations as well as higher costs associated with the new contract,” Tome told investors.

Thousands of online retailers worldwide use UPS for their fulfillment either exclusively or in combination with other carriers.

U.S. domestic segment revenue declined 7.3% to $16.9 billion in the quarter. Average daily volume (ADV) ended the quarter 7.4% below 2022 levels. However, that still represented a step up from an “exceptionally low third quarter” that preceded the period, Tome said. Revenue per piece of mail was slightly positive, the carrier said without revealing more.

 

Fastenal relies on digital for long-term growth

Customers of Fastenal Co. want more flexibility to order via multiple digital channels including a self-service web shop, vending machines and vendor-managed inventory systems. The industrial and construction supplies distributor says it will continue on its course of expanding its digital sales capabilities.

Fastenal announced its fourth quarter and full-year financial performance,  stating that the data created through their digital capabilities enhances product visibility, traceability, and control that reduces risk in operations and creates ordering and fulfillment efficiencies for both themselves and their customers.

In a Q4 and year-end earnings call, Fastenal executives elaborated on the value of each of its digital channels including its FASTVend vending devices and FASTBin product bins, each of which Fastenal embeds with digital technology to track product sales; and what Fastenal defines as ecommerce, including self-service online purchasing via Fastenal.com and electronic transactions conducted through EDI.

They also clarified during a Q&A period with investment analysts that the FASTVend and FASTBin services do not cannibalize Fastenal’s self-service ecommerce sales.

Dan Florness, president and CEO, noted that ecommerce sales have steadily climbed as a percentage of total sales, rising to about 25% in 2023 from about 5% several years ago.

For the fourth quarter, Fastenal said that all digital sales, including ecommerce and the FASTVend and FASTBin transactions which in aggregate make up what Fastenal calls its “digital footprint” accounted for 58.1%, or $1.02 billion, of $1.76 billion in total net sales. That’ s up  from 52% a year earlier. Fastenal didn’t break out total digital sales for all of 2023.

Fastenal also said that its digital purchasing options play a vital role at its Onsite vendor-managed inventory locations, which it manages at or near customers’ facilities. The company said it increased its number of Onsite locations by 12.3% last year to end 2023 with 1,822 active sites.

 

FordDirect rolls out a new dealership ecommerce platform

FordDirect, a joint venture the vehicle maker has with its dealers for marketing and technology initiatives, is rolling out a new ecommerce system.

Called The Shops, the ecommerce platform will provide Ford and Lincoln dealers and resellers with tools and features that enable them to link to pre-approved service vendors. Vendors can then help with tasks such as customer lead generation, warranty authorization and credit pre-approval, among others.

Specific vendors on FordDirect’s ecommerce platform include:

  • Better Car People, a comprehensive business development platform.
  • ComplyAuto, a dealership compliance software platform for privacy, security, safety/human resources, and finance and insurance.
  • OfferLogix, a credit pre-qualification service.
  • Velocity Automotive, reconditioning management software.
  • Volie, automotive call center software.
  • WarrCloud, a warranty processing technology platform.
  • Work Truck Solutions, commercial truck and van digital marketing and inventory merchandising tools.

According to FordDirect CEO Dean Stoneley, dealerships face an increasing demand for day-to-day resources, including meeting customer expectations, complying with regulations, managing employees, updating technology, and planning sales events. The auto industry in all its parts and aspects now transforms through technology, which makes dealers more challenged than ever to stay current while meeting their business goals. The Shops is now open to help Ford dealers and Lincoln retailers find the best vendors in the market for all of their needs.

Disney launches shoppable TV

Disney announced the launch of a beta program for its first shoppable ads. Consumers will be able to make purchases through the new Gateway Shop in Hulu while maintaining their viewing experience, according to Disney’s press release.

According to Jamie Power, senior vice president of addressable sales at Disney Advertising, with the most scale in streaming and the strongest audience signal through the company’s foundational data and ad tech stack, Disney is uniquely enabled to power dynamic ad experiences that connect consumer interest and intent to the purchase — straight from the stream.

Viewers will see personalized advertisements for products that are sent to phones through push notifications or email. Over the next few months, Disney will grow the interactive shopping features in streaming, Disney says.

The beta test will initially be available exclusively on Hulu, which Disney now owns, with plans to add Disney+ in the future, digitalcommerce360.com reports.

Disney named Unilever as one of the advertisers included in the initial beta test. The media company is searching for other retailers and consumer packaged goods companies to advertise, Ad Age reported.

Gateway Shop is an expansion of Gateway Go, launched on Hulu in 2020. The earlier feature gave viewers the option to get more information on an advertisement sent to their phone through push notifications, email, or a code. Since then, more than 200 advertisers across categories have signed on.

The goal is to help audiences connect with the brands they love with the least amount of friction, without disrupting the content they’re streaming.

Amazon, Walmart, and Home Depot are all experimenting with shoppable TV, too. Amazon tested shoppable ads during the first-ever Black Friday NFL game it streamed this year. Walmart inked a deal with NBCUniversal in November to place shoppable ads on the streaming platform Peacock. The ads gave consumers the chance to buy Walmart items featured in select Bravo shows. And Home Depot released a branded content series with Vizio in 2023.

57% of ad agency professionals believe shoppable video content is the next frontier of retail media, according to an April 2023 poll from Insider Intelligence.

‘Tsunami’ of holiday returns expected this year: Salesforce

Retailers are bracing for a surge in holiday returns after a record-breaking Cyber 5, starting on Thanksgiving and ending on Cyber Monday. Software provider Salesforce has forecast a “tsunami of returns” for the second year in a row as consumers have become more picky about what to leave behind from holiday shopping. The firm’s forecasts are based on an analysis of the activity of 1.5 billion consumers in 64 countries, www.digitalcommerce360.com reports.

Salesforce says the rate of online purchases that were returned doubled the week following Cyber 5 and has remained high ever since. The company predicts more than $131 billion in holiday purchases will be returned.

That figure encompasses returns of purchases made globally in November and December 2023. It is based on returns patterns in dollars and percentages from the 2022 holidays and the rest of 2023, Salesforce says.

Return rates will likely rise as high as 20% for a few weeks after the holidays into 2024 as people return gifts, says Rob Garf, vice president and general manager of retail and consumer goods at Salesforce. In 2022, global returns grew to 13% of total orders in the holiday period, an increase of 63% year over year.

Retailers largely corrected more generous return policies after the large increase last year to preserve profit margins, says Garf, adding that experts see retailers oversteering and negatively impacting customer service and experience. The returns experience must be easy, clear, and reasonable, or retailers risk brand loyalty and repeat purchases. He points out that a positive return process can be the first step in a new shopping process for a consumer. Meanwhile, a poor experience can make it the last time a consumer interacts with the retailer.

Returns can be a costly problem for retailers. Companies pay an average of $26.50 to process $100 in returned merchandise, The Wall Street Journal reported in May. In 2022, about 16.5% of retail purchases were returned, totaling about $816 billion, according to the National Retail Federation.

Rates are even higher for apparel, averaging 24.4% between April 2022 and March 2023, according to Coresight Research. That translates to about $38 billion in returned apparel in 2023, or the equivalent of all U.S. Cyber 5 spending this year.

The cost of processing a return of a specific item varies based on several factors, according to reverse logistics firm Optoro. For example, some apparel pieces may be out of style or out of season by the time the return is processed and cannot be sold for full price.