Amazon Out Delivers UPS, FedEx on Cyber Monday
Instacart + Finish Line & JD Sports, mobile conversions stall, holiday shopping considerations
Early estimates show that Cyber Monday spending came in at a whopping $12.4 billion domestically this year. We’ll break down how brands made those sales and why the growth of mobile traffic isn’t all good news. But first, a peak at how Amazon has outgrown UPS and FedEx, a new Instacart sports-fashion partnership, and some psychological statistics…
This week’s edition is brought to you by Curbivore’s 2-for-1 BFCM Sale.
Amazon Now Top U.S. Private Deliverer
lnstacart Kicks Off Finish Line, JD Sports Partnership
Chart Time | Holiday Shopping Motivations
BFCM Mobile Conversion Troubles
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3PL | Amazon Now Biggest Private U.S. Deliverer
It’s no longer “what can Brown do for you?” or “when it absolutely, positively has to be there” but simply “ooohmygod look at all that junk you ordered on Amazon.” As of this holiday season, Amazon is officially delivering more packages than either UPS or FedEx, as it has gone from their customer to being a competitor. So far this year, Amazon has delivered 4.8 billion packages in the United States, with 5.9B expected by year’s end; that’s up from 5.2B total last year. UPS will do about 5.3B this year, while FedEx sits a bit above 3 billion. (Publicly owned USPS is still king.) Part of Amazon’s advantage is its fleet of franchise contractors, which now consists of about 200,000 drivers; some bought the right to their routes for as little as $10k, but have to continue to meet Amazon’s exacting delivery demands.
The Big Picture: Go behind the scenes at one of Amazon’s fulfillment centers on Cyber Monday, and it’s clear what a fine tuned delivery machine Bezos & Co have built, as the site geared up to handle more than 1,000 orders per second. Amazon’s Robbinsville, NJ site is the size of 28 football fields, employs 3,000 workers, and a slew of robots as well (Amazon has over 750k robots worldwide — including a “Hercules” pallet bot that looks like a Roomba with a 1,250 lb capacity.) With each of Amazons’ fulfillment centers getting bigger and more capable, the company is now able to deliver 75% of its orders from within a given customer’s region.
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3PD | It’s A Shoe In — Instacart Partners with Finish Line
Instacart has a new partner — JD Sports and its subsidiary Finish Line — as the 3PD moves further and further out of groceries and into “same day delivery for everything.” The partnership covers 500+ stores in the U.S., bringing 16,000 products onto Instacart’s app. “With this partnership, we are taking our omni-channel strategy to new heights, providing customers with an unparalleled shopping experience, focused on convenience,“ said Kristin Matter, VP Digital at JD Sports.
The Big Picture: JD Sports is one of the first sports-fashion retailers to launch on a 3PD, making this a new way for consumers to access athletic goods — fancy a soccer cleat with that Big Mac? JD owns a number of other brands, including Size?, Footpatrol, Shoe Palace, DTLR, Livestock, Sprinter, Sport Zone, and Sizeer across Canada, the U.K. and Europe, giving ample room to further expand this partnership. (Although we’d like to remind readers that currently Instacart only operates in the U.S. and Canada, despite a 2021 announcement that it was planning an international push.)
CHART TIME | What’s Motivating Holiday Shoppers?
With BFCM marking the official start to holiday shopping season, it’s worth thinking about what consumers are looking for, when they consider a holiday purchase (be it a meal, groceries, physical goods, even travel…) Not surprisingly, prices and promos are a big factor for everyone, but breaking it out by age cohort and you see interesting divergences, like Gen Z and Millennials caring more about quality than their young and older peers. As always, know thy audience!
BFCM | Mobile Traffic Dominates As Cyber Monday Hits $12.4B
The tentative results are in, and Cyber Monday sales hit $12.4 billion, with Black Friday coming in at a cool $9.8B as well, pushing November’s total sales revenue up to $109.3 billion. Retailers slashed prices about 20% on the savings holidays, with computers taking the biggest cuts; Adobe Analytics notes that small kitchen appliances seemed to be especially popular this year. Meanwhile, Salesforce observed strong growth for the health & beauty segments, as well as footwear (good timing on that Finish Line partnership…) Mobile phone traffic surged, more so than desktop, accounting for 82% of visits in the United States.
The Big Picture: People may love browsing on their phone, but they don’t always love checking out: conversion rates are twice as high for desktop as they are on mobile. Brands also continue to struggle identifying their new visitors, especially on mobile (thanks Apple,) with 79% of visitors going unidentified. Enterprise retailers were able to improve their ID rates by 12% YoY, while mid-market brands actually saw identification fall, showing the value of investing in tech ops. As always, getting shoppers onto first party apps is the best way to get a sticky enough relationship to make the sale…
A Few Good Links
UPS unveils robot-heavy Velocity facility. Bay Area residents voice concerns about local ghost kitchens. Fast food prices surge. Delivery robot bonks dog. Every state’s top cheeseburger. How grocers can maximize first party data. Multi-concept operator Savory promotes two execs. Taco Bell dominates web chatter. JitB market expansion looking good. Two Chicago specialty markets merge. Mercedes Benz unveils new vehicle inspection tech. EV truck maker GreenPower expands dealer network in CO, NV. Riverstone Logistics expands to FL. FAT Brands to open 10 multi-concepts in TX.White House launches DOT Multimodal Freight Office.
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