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American and Chinese Consumers are Shopping Like There’s No Trade War

shopping

American and Chinese Consumers are Shopping Like There’s No Trade War

What Trade War?

If shoppers are worried about the U.S.-China trade war, it’s not showing up yet in measures of their buying confidence or holiday retail sales.

We are more than a year into dueling tariffs between the United States and China, and we know that tariffs add costs to supply chains, but how much of those costs are passed on the consumer depends on decisions by manufacturers, buyers and retailers as well as the “import-intensity” of the products we buy.

So far, if prices have risen on consumer products, it’s not dampening American appetites to buy. And Chinese consumers don’t rely to a great degree on imports in general, so China’s retaliatory tariffs on U.S. imports don’t appear to be the biggest factor in their personal spending either.

Spending and the U.S. Economy

At the end of the third quarter, the Bureau of Economic Analysis reported that U.S. consumer spending was on track for $14.67 trillion this year, reaching an all-time high.

Personal expenditures make up 68 percent of the U.S. economy, and it’s consumer spending that’s keeping growth of our economy from slowing further. (By comparison, our “negative net exports” or total exports minus total imports, comprise five percent of U.S. GDP.)

Two-thirds of spending is on services such as housing and health care, which are largely impervious to the trade war. The remaining third is spent on non-durable goods such as clothing and groceries, and on durable goods such as cars and appliances.

Brimming with Confidence

The Conference Board’s Consumer Confidence Index is a monthly report on consumer attitudes and buying intentions. Despite analysts’ expectations that concerns related to trade disputes would cause U.S. consumers to become cautious, the index shows a trend of rising consumer confidence since 2009.

Breaking Records Online

Retail sales figures tell us whether that confidence is translating into spending. Indeed, American consumers are still filling their real and virtual shopping carts to the brim.

According to the National Retail Federation (NRF), more than 165 million people were expected to shop over the five-day Thanksgiving holiday weekend. Online sales for last holiday weekend are already being reported and appear to be breaking records.

Americans spent $7.4 billion online on Black Friday, up 19.6 percent from last year. We spent another $3.6 billion on Small Business Saturday, up 18 percent from last year. And while surfing from our desks at work, Americans spent $9.2 billon on Cyber Monday, up 16.9 percent from last year. More than half of Americans surveyed by NRF said they start their holiday shopping the first week of November. Online sales for November came in at a whopping $72.1 billion.

Chinese Consumers Outspent Us All

Cyber Monday is so successful in driving online sales in the United States that Canada, the UK and Germany have all adopted Cyber Monday to kick off their holiday shopping seasons. Australia launched “Click Frenzy” day. The Netherlands’ equivalent is linked to the December 5 Sinterklaas holiday.

But hands down, the world’s largest 24-hour online shopping day goes to China’s Singles Day held on November 11 annually. This year, Chinese online shoppers bought $38.3 billion on Singles Day alone. Think of it this way – that’s more than $1 billion every hour.

This is not a one-day phenomenon. If you were to overlay China’s consumer confidence index with that of the United States, they would look similar. Despite being slightly lower for China and with a dip in 2016 that we didn’t see in the United States, consumer confidence rose between 2014 and remained high in 2019, trade war notwithstanding. In mid-2019, retail spending in China surpassed retail spending in the United States for this first time.

Retail Spending in China Exceeds US

Beyond the Tariff Headlines

Financial analysts are watching China’s consumer spending carefully amidst the trade war. Many said this summer’s drop in car purchases was a harbinger that shoppers are growing wary, but the slowdown also coincided with the end of big discounts. Others say retail sales actually underestimate the strength of China’s overall consumer spending because those numbers offer just a partial picture of personal spending on goods and services, which include large expenditures on healthcare, education and leisure activities.

For this reason, some prominent Chinese investors are nonplussed by the Trump Administration’s tariffs. They look at a decline in certain manufacturing and exports as a structural shift in China’s economy – an “economic rebalancing” – that began long before the current trade war. In their view, household consumption will drive most of China’s future economic growth, and China’s consumer spending is not very dependent on imports.

According to World Bank data, consumer imports comprise just 13 percent of China’s overall imports. Most of the large multinational consumer goods companies now produce in China for the Chinese consumer. According to McKinsey analysis, across key consumer categories including personal digital devices and personal care products, Chinese brands have become credible competitors to foreign brands, acquiring greater market share – and shielding Chinese consumers from tariffs on U.S. imports.

Consumer Spending to Play Bigger Role in China’s Growth

Consumption is playing a much larger role in China’s economic growth than just a few years ago. In 2011, consumer spending accounted for less than 50 percent of China’s GDP growth. Last year, it accounted for 76 percent of GDP growth, outpacing both manufacturing investment and exports.

In fact, China’s total exports of goods and services as a percentage of GDP has dropped from a high of 36 percent in 2006 to 19.5 percent in 2018, with exports to the United States at just four percent.

That why China’s central bank is also monitoring consumer sentiment. In recently released results from its biennial survey of 18,600 residents in 31 provinces, nearly 80 percent of respondents expressed caution about spending and a preference for saving.

China’s politburo has directed the government to focus on turning up the tap of consumer spending by China’s growing urban middle class and to kick-start spending in rural areas. The government already cut personal income taxes and began offering subsidies for large ticket energy-saving home appliances and energy efficient vehicles. The government is expected to announce more measures in the coming months designed to goose household spending.

WB Chart Title China Exports as % of GDP

Business is Ill at Ease

Economists worry the trade war is causing a drag on economic growth, not just in the United States and China but globally. Businesses say the trade war with its escalating tariffs is a “wild card” in their planning. Uncertainty is causing them to hold back on capital expenditures.

It’s looking less likely the United States and China will agree to a “Phase 1” trade deal by the end of the year, but even if they do, the partial deal may not be enough to restore business confidence. If businesses continue to hold back on investments and reduce inventories, it could start to negatively impact jobs and incomes. This may be particularly true in China where a larger portion of the population is dependent on manufacturing jobs.

Consumers Keep Calm and Shop On

Meanwhile, holiday shopping is in full swing. Some holiday merchandise is already subject to tariffs on Chinese imports, but the tariffs the United States plans to impose on December 15 will affect many more consumer products. If imposed, buyers and retailers will have to decide how much cost to pass on to their suppliers and consumers in the coming year.

For now, shoppers are keeping calm and shopping on with resilience. But as a last line of defense against slowing growth, their confidence can be fragile. Where the trade war is concerned, buyer beware.

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Andrea Durkin is the Editor-in-Chief of TradeVistas and Founder of Sparkplug, LLC. Ms. Durkin previously served as a U.S. Government trade negotiator and has proudly taught international trade policy and negotiations for the last fourteen years as an Adjunct Professor at Georgetown University’s Master of Science in Foreign Service program.

This article originally appeared on TradeVistas.org. Republished with permission.

e-commerce

5 Must-Have Features of Enterprise E-Commerce

E-commerce is everywhere — unless, of course, you look in the B2B space. Unfortunately, one segment lags behind all the rest when it comes to online sales: manufacturers. Just 38% of manufacturers have e-commerce websites, and only 6% of all manufacturer sales come through this particular channel. 

Part of the reason manufacturers are so slow to adopt e-commerce can be traced back to the old adage “if it ain’t broke, don’t fix it.” The traditional ways of doing business largely haven’t posed a problem yet, so many manufacturers don’t feel a real sense of urgency to explore the increasingly relevant direct-to-consumer model. 

It also has a lot to do with technical hurdles. For many manufacturers, moving to e-commerce involves taking on yet one more system to master — that or an expensive integration with their current enterprise resource planning (ERP) software. It’s nearly impossible to get an e-commerce platform to talk to an old “closed” mainframe, so plans to upgrade often involve a two-year timeframe or longer to get everything up and running. They might also involve a million-dollar price tag. Not surprisingly, this tends to put e-commerce on the back burner pretty quickly. 

And it’s important to note, too, that most manufacturers work through distributors and dealers, making e-commerce seem like nothing more than a mere alternative to their current traditional sales channels. 

A Missed Opportunity

What many manufacturers seem to be missing, though, is that B2B customers are also B2C customers. Chances are that they’re already shopping online for their personal needs, and not having a way to buy their business products and services online can have a hefty negative impact on the customer experience. If you’re manufacturing a commodity product and your sales process lacks the convenience of shopping for that product online, your customers might begin to look elsewhere. 

Remaining passive about e-commerce is simply the wrong approach, especially with B2B buyers moving more of their purchases online all the time. As it stands, nearly half of all companies utilize online channels for 50% to 74% of all their corporate purchases. Not being online just means you’ve missed out on an opportunity — not only to secure additional sales, but also to broaden your reach to a global level

Also, remember that it’s easier than ever for competition and new players in the market to get in front of your customers via Google, Facebook, and email. Not having an e-commerce site could easily cost you market share, even if the competition’s product isn’t as good as yours.

Beyond the Basics

Knowing that it isn’t enough to conduct all business offline, know, too, that it isn’t enough to just invest in getting an e-commerce platform, leave it there, and call it good. Your site has to offer the functionalities necessary to run an online business. If your system doesn’t support multiple pricing tiers, it probably also doesn’t mimic your current sales process. Clearly, that’s not a good thing. 

Your site needs to be able to support multiple buying options, such as “requests for quotes” as opposed to a shopping cart model. It can take time to arrive at a number in a complex B2B transaction, and the last thing you want is for a customer to have to take the interaction offline just to finalize scope and nail down specifics. 

This naturally leads to my next point. Assuming your e-commerce site comes equipped with all the basics like browse, add to cart, checkout, email confirmation, etc., there are a few features to look out for at the enterprise level. Those often include the following:

System integration options

In e-commerce, a certain amount of coordination is necessary between the website itself and your back-end system that you use for inventory and accounting purposes. Without proper integration, order fulfillment can easily get problematic. Focus on maintenance, data input, and offering a seamless user experience. Most of all, understand all the system integration options of your marketplace website before going with one provider over another.

Proper data to support search

Product information is important. It’s what consumers see prior to making a purchase decision. But it can sometimes pale in comparison to the product data used behind the scenes. A number of data fields and HTML tags enable your products and website to rank in both Google and on-site search results. Make sure your platform accommodates these options. Also, inquire about the tracking capabilities of your on-site search function. It can be useful to monitor what users found — and didn’t find — during a visit.

Customer tiers

At the enterprise level, you’ll likely run across different types of customers. Being able to segment these customers into various tiers can come in handy. Based on their purchase history, for example, you might determine that one tier would respond well to a certain promotion while another’s browsing behavior could inform subsequent product recommendations. In other words, segmenting tiers allows you to personalize your messaging, pricing, and other marketing efforts to fit the needs of your customers. So look into this functionality while reviewing your e-commerce options.

Analytics integration

Whether you’re looking at an off-the-shelf platform or a custom solution, reporting is very important. At a bare minimum, make sure a standard tool like Google Analytics can be integrated with your e-commerce system. You’ll also want to inquire about the setup of advanced features like e-commerce tracking.

Merchandising

Generally, any platform you go with will provide the functionality of assigning products to categories. This can help with on-site search and make it easier for visitors to browse your product line. Beyond that, you might wish to feature certain products. The question, then, is what ability do you have in the platform to create banner ads, highlight related products on a product page, create landing pages around a spotlight topic for the month, and feature products in other ways? 

Providing a good online experience naturally makes customers feel good about doing business with you. It also increases the likelihood of driving new customers to your business without needing to invest in additional resources. 

Ultimately, you can handle more transactions with an e-commerce site in your corner. Just make sure your site provides you with all of the functionalities you need to keep your business running smoothly and your customers happy. 

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Michael Bird is the CEO of Spindustry, a digital agency focused on e-commerce, SharePoint portals, and enterprise websites. He has almost 30 years of experience in interactive development, user behavior, and business solutions. His successful agency, Spindustry, puts these strategies into practice to help businesses grow.

south american

Embracing the South American Ecommerce Marketplace

Ecommerce is on the rise in South America. Double-digit growth is expected for 2019 with sales of $71.34 billion (USD), tying it with the Middle East and Africa as the world’s second-fastest-growing retail ecommerce market. 

That’s great news for shippers looking to expand their online retail presence in South America.

A diamond in the rough

Online retailers in South America have been struggling for years to overcome several obstacles to success, including extensive customs delays, poor transportation infrastructure, and the lack of end-to-end supply chain visibility. Progress has been made on all three of these “challenges,” but more work is necessary to ensure the region’s continued double-digit growth. 

Within each challenge lies opportunity

While these obstacles may keep a few shippers from expanding into South America, others are viewing the area as a “diamond in the rough” and working diligently to reap the rewards of this truly untapped region. 

Having the right information is the first step to wading through the muck and mire of this complicated ecommerce marketplace:

South America customs vary by country

Red tape and bureaucracy pose the biggest obstacles for importing products into South American countries. In addition to customs taxes, tariffs, and fees, it can take 30+ days for some goods to be cleared through customs, especially in Brazil and Argentina. As a result, inventory builds up, costs rise, and customers wait longer for their products to arrive. In comparison, however, Chilean customs are very similar to the U.S. and allow products to flow through relatively quickly.

As you can tell, customs procedures can differ significantly, making it difficult for shippers to ensure compliance with each region’s unique customs. For a more seamless process, it’s essential shippers work with a customs broker or third party logistics provider (3PL) with local offices in the area. They’ll know the customs standards and understand the paperwork necessary to ensure products are approved for import.

Free trade agreements 

The United States-Chile trade agreement allows all U.S. exports of consumer and industrial products to enter Chile duty free. While still in the works, the United States-Brazil free trade agreement can help facilitate trade and boost investment between the two countries, especially in infrastructure. The United States-Colombia Trade Promotion Agreement eliminates tariffs on 80% of U.S. consumer and industrial imports into Colombia. 

South America infrastructure at port and inland

South America is hobbled by its inadequate infrastructure, and it’s probably not going to change anytime soon. Roads remain the primary means of transportation, but 60% are unpaved, hampering the speed of delivery by truck to inland locations. Improvements are slowly occurring, thanks to increased government funding (but corruption hampers many efforts). It’s worth mentioning that China, the largest trading partner of Brazil, Chile, and Peru, invests heavily in the region, providing more than $140 billion (USD) in loans for infrastructure improvements in the past decade, according to The Business Year.  

While surface transportation remains stagnant, ocean freight shows promise. According to icontainers.com, routes going to and from South America represent 15% of the total number of trade services.

The largest container port in South America is in the city of Santos in Brazil’s Sao Paulo state. Its location provides easy access to the hinterlands via the Serra do Mar mountain range. More than 40% of Brazil’s containers are handled by the Port of Santos as well as nearly 33% of its trade, and 60 % of Brazil’s GDP, according to JOC.com

In 2018, Brazil’s busiest container cargo port handled 4.3 million TEUs, compared with 3.85 million TEUs in 2017. 

For Argentina, Zarate serves as the critical port for roll-on/roll-off (ro-ro) and breakbulk cargo, while Buenos Aires and Rosario serve as the top container ports. Only two countries in South America are landlocked, Paraguay and Bolivia. 

Shippers and ocean carriers using the Port of Santos have been complaining about congestion and labor disputes at the port, and about politicization and time-consuming bureaucracy. That’s why it’s essential that shippers must have the latest information on traffic through these South American ports. Global freight forwarding companies in the area will have the newest information available to help you choose the right port of entry for your freight.

End-to-end supply chain visibility

Most online retailers and carriers understand that the sale is not complete until the product is delivered to the consumer. If merchandise is damaged during transport or arrives much later than promised, it reflects poorly on both parties and undermines consumer trust in ecommerce purchases. 

Lack of adequate infrastructure has forced many online retailers to put logistics on the back burner, focusing on the user experience through purchase. That’s why many products take weeks to arrive at the customer’s door, setting a bad precedent that must change. 

The South America trucking industry is highly fragmented, with providers ranging from owner-operators (about one-third of the industry) to sizable fleet operators and experienced freight forwarders who may not own any trucks at all, according to Tire Business newspaper. 

Final mile, LTL services paramount in South America

Once your product reaches port in South America and makes it through customs, how it gets delivered to the customer’s door can add extensive costs to your supply chain. Less than truckload (LTL) and final mile services are paramount to successfully operating in the region. Especially those carriers that can provide GPS freight tracking capabilities, such as C.H. Robinson’s Navisphere® technology

Final thoughts

Yes, there are obstacles to operating a supply chain in South American countries. Knowing the ins and outs of each country’s unique customs procedure, understanding which South American ports are best for your freight, and being able to track your shipments end-to-end will ensure your success in the region. Shippers who realize the potential of this “diamond in the rough” marketplace should work with a freight forwarder who will be extra focused and diligent in ensuring their freight moves quickly from customs fiscal warehouses to the final destinations. 

Enlist the aid of a global freight forwarding provider, like C.H. Robinson, who offers a global suite of services and has offices in the region that can help navigate any disruption in your supply chain.

Start the discussion with an expert in South America to accelerate your ecommerce trade. 

China

What Every Business Should Know About Selling in China

Not only is China the most populous country on earth (1.3 billion people), it also has the second-biggest economy in the world by Nominal GDP (14.242 trillion dollars).

As the country has pursued ever more progressive policies to trade (and despite the current trade war between China and the United States) more and more opportunities to sell in the country have arisen to businesses across sectors. If you see China as a potential growth market, here are some of the most important considerations when selling in China.

Seek advice

When looking to enter a foreign market, it is always advisable to seek sage advice, and even look to local businesses who you can partner with. Although you may not wish to go down the partnership route, it is definitely advisable to seek the counsel of businesses who are already operating within the sphere, or groups such as the Global Innovation Forum who often provide free advice regarding penetrating new markets. 

This is a smart strategy because selling in China will be totally unlike selling domestically, or in European markets, for example. Any insights that you can garner will be potentially critical to the success of your sales strategy and approach in China, because as is abundantly clear, you will be operating within a totally different market, both literally and culturally.

“The cultural considerations when accessing new markets should never be overlooked. From the way that you brand and market your products to the way that you negotiate with local businesses and retailers, everything you do will be influenced by different rules: rules to which you are unfamiliar. Get the help you need to pass through this difficult phase,” advises Grant Tarrant, a business writer at Writinity.com and Lastminutewriting.com.

Understand Chinese governmental practices and rules

Although the Chinese Government has grown increasingly receptive to foreign businesses working and partnering in China, rules will still be a little conservative in comparison to the Western approach. Make sure you totally familiarize yourself with what you are expected to adhere too, especially when visiting the country and seeking to operate a sales operation from within China.

For example, you will need to understand the levels of bureaucracy that exist to set up a business entity that operates within China. For example, you may need to set up as a Wholly Foreign-Owned Enterprise (WFOE) to operate, and this can be a costly and timely exercise that may delay you implementing your sales strategy. Forming a business plan which pays close attention to all the requirements (and timeframes) of the Chinese state is essential.

Understand your customer

This piece of advice holds for whoever you are selling too, but obviously your Chinese customer base will be different from your US customer base and will have different expectations. For example, haggling is a standard cultural procedure, and Chinese customers demand to know a product impeccably before they buy, so ensure that your eCommerce operation includes high numbers of images and product reviews: this will be expected.

“If you study Chinese eCommerce sites such as Taobao you will see that it facilitates the Chinese custom of haggling down prices. In the West we are totally unfamiliar with this practice as we are satisfied that the price is the price, Be prepared to change your approach accordingly,” says Rachel Walliston, a marketer at Draftbeyond.com and Researchpapersuk.com

Provide impeccable customer support

Chinese customers have come to expect an extremely high level of customer support from their retailers and will demand this from any new business operating within their sphere. Knowing this, make sure you ramp up support efforts, and that, of course, raises questions regarding how you will do this in a new language and culture. Seeking advice from established entities is again the recommended route, and establishing support centers in the country is also best practice. 

Understand the marketing and communication channels

If you go in with a Facebook-based marketing strategy, be prepared to be disappointed. In China the social media platforms are different, for example, WeChat is one of China’s most popular platforms, but barely exists outside of the country. It has been dubbed a ‘super-app’ because it can be used for a multitude of actions, so utilizing such platforms is an absolute must if you wish to successfully penetrate the Chinese market. 

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Ashley Halsey is a writer, editor and international business expert who can be found at both Luckyassignments.com and Gumessays.com. She has been involved in many projects in Asia, and enjoys traveling, reading and cultural exchanges.

two-day shipping

Two-Day Shipping or One-Day Order Processing: What Wins?

Your average customer doesn’t know much about logistics, so every e-commerce company faces a unique concern for giving customers what they want. Do you offer two-day shipping for when an order is processed, or speed up your processing, all in order to meet their demands for quick products?

From the customer perspective, two-day shipping obviously sounds fantastic. However, it stops being so great when things take far longer than two days. Imagine if your order processing takes a week — how would customers feel?

In the same light, if an order is processed in a few hours, but shipping takes weeks, people might not even click “buy” if you’re upfront about how long it’ll take to get to their door. Google will lead you to many people who are disappointed with shipping times, regardless of the promise they were made.

So, what’s an e-commerce business to do?

Two-Day Shipping Changes

Adding two-day shipping is all about speed in your warehouse. As soon as this team receives an order, they get to work picking, packing, and sending it off to the customer. Buyers have a clear understanding of when things will arrive after the order is shipped and they’ll hold you to it.

To achieve this, you’ll need a streamlined warehouse with quality technology and practices, optimized to move orders as fast as possible. You also need enough people to prevent a backlog. Warehouse management tools are a tremendous help for this labor planning, plus they can ensure you’ve got the inventory of products as well as boxes and packaging materials to keep you ready.

The good news for a business is that you can keep your shipping promises even when inventory runs low because you’re guaranteeing delivery after order processing. 

Making the most out of two-day shipping requires you to be transparent. Customers need to know that the two days are when the product leaves your warehouse and arrives at their door, not when they click “buy.” Companies often address this by providing an estimated arrival date and then following up with an email once the product is shipped.

Thoughts on One-Day Order Processing

Order processing, simply put, is your ability to verify and use a purchase order to create a warehouse shipment order.

Most customers just don’t think about order processing when they’re making a purchase. Some don’t really understand the concept because they’re treating your business like a brick-and-mortar solution where they walk in, ask for what they want, and then you (the business) immediately know and can start on their order.

The behind-the-scenes actions of verifying orders and payment, checking inventory, creating an order for a warehouse, and getting it all in line when your staff is there simply blow by without a thought. You can see this in the wide range of explanations, FAQs, and responses to customer complaints about package deliveries and times. Even Comcast has to explain order processing times on its support pages.

If you’re able to streamline all of those activities, it’s a boost that customers will love, even if they don’t realize it. Processing every part of an order in a single day, or on the same day, allows your team to pick, pack, and send faster. It’ll improve the speed of all orders you receive, not just those that select expedited shipping.

Most of this is done via technology like warehouse management systems, which allow you to better control costs and understand revenue as well as inventory. What you’ll like about using a WMS is that they process orders quickly enough for you to insert them in the workflow where they need. So, if you get two orders — the first at regular shipping and then another an hour later with two-day shipping — the system will automatically move the two-day shipping to the front of the line.

The Customer-Driven Choice

Choosing between these two options requires one more consideration: where are your customers unhappy?

Unhappy customers won’t buy from you again and are likely to leave negative reviews that can impact other sales. When concerns are around your shipping, read them carefully. Ask if you can best respond by processing an order more quickly and reducing long wait times or if they demand immediate satisfaction with the two-day turnaround.

In general, customers are more likely to understand two-day shipping on your website, so if the issue is clarity or complaints around not knowing when goods will arrive, this might be a better course of action. On the other hand, if they don’t like how their order disappears for days or weeks before they get a notice about it being shipped, order processing can be the right solution.

Shoppers on the e-commerce behemoth Amazon will sometimes gripe that their Prime packages still take a week to arrive. Often this is because the seller’s order processing systems and inventory levels have issues. Because customers are paying for two-day shipping, they can feel cheated. It’s a direct sign for where those companies should focus their next warehouse investments.

Both two-day shipping and one-day order processing can improve your operations. When possible do both. When not, pick the one that your customers will understand and appreciate most based on the feedback you already have available.

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Jake Rheude is the Director of Marketing for Red Stag Fulfillment, an ecommerce fulfillment warehouse that was born out of ecommerce. He has years of experience in ecommerce and business development. In his free time, Jake enjoys reading about business and sharing his own experience with others. 

jersey

EU Jersey Market – Consumption Posted Solid Gains, Reaching $26B

IndexBox has just published a new report: ‘EU – Jerseys, Pullovers, Cardigans And Similar Articles – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

The revenue of the jersey market in the European Union amounted to $26.1B in 2018, growing by 9.2% against the previous year. This figure reflects the total revenues of producers and importers (excluding logistics costs, retail marketing costs, and retailers’ margins, which will be included in the final consumer price). Over the period under review, jersey consumption continues to indicate a relatively flat trend pattern. The growth pace was the most rapid in 2008 when the market value increased by 18% y-o-y. In that year, the jersey market attained its peak level of $28.9B. From 2009 to 2018, the growth of the jersey market remained at a lower figure.

Production in the EU

In 2018, approx. 229M units of jerseys, pullovers, cardigans and similar articles were produced in the European Union; lowering by -3.2% against the previous year. Over the period under review, jersey production continues to indicate a deep curtailment. The growth pace was the most rapid in 2017 with an increase of 10% year-to-year. The volume of jersey production peaked at 398M units in 2007; however, from 2008 to 2018, production remained at a lower figure.

In value terms, jersey production amounted to $4.3B in 2018 estimated in export prices. In general, jersey production continues to indicate a drastic contraction. The pace of growth appeared the most rapid in 2017 with an increase of 17% y-o-y. Over the period under review, jersey production reached its maximum level at $7.8B in 2007; however, from 2008 to 2018, production remained at a lower figure.

Exports in the EU

In 2018, approx. 1B units of jerseys, pullovers, cardigans and similar articles were exported in the European Union; picking up by 2.9% against the previous year. The total export volume increased at an average annual rate of +2.8% over the period from 2007 to 2018; however, the trend pattern indicated some noticeable fluctuations being recorded in certain years. The growth pace was the most rapid in 2016 when Exports increased by 23% year-to-year. The volume of exports peaked in 2018 and are likely to see steady growth in the immediate term.

In value terms, jersey exports totaled $13.3B in 2018. The total export value increased at an average annual rate of +2.0% from 2007 to 2018; however, the trend pattern remained relatively stable, with somewhat noticeable fluctuations being observed over the period under review. The most prominent rate of growth was recorded in 2017 when Exports increased by 15% year-to-year. In that year, jersey exports reached their peak of $13.5B, and then declined slightly in the following year.

Exports by Country

In 2018, Germany (215M units), distantly followed by Belgium (120M units), Italy (119M units), Spain (102M units), France (85M units), the Netherlands (70M units), Poland (68M units) and Denmark (64M units) were the main exporters of jerseys, pullovers, cardigans and similar articles, together generating 81% of total exports.

From 2007 to 2018, the most notable rate of growth in terms of exports, amongst the main exporting countries, was attained by Poland, while the other leaders experienced more modest paces of growth.

In value terms, Italy ($3.2B), Germany ($2.7B) and France ($1.4B) appeared to be the countries with the highest levels of exports in 2018, with a combined 55% share of total exports. Belgium, Spain, Poland, Denmark and the Netherlands lagged somewhat behind, together comprising a further 29%.

Poland experienced the highest rates of growth with regard to exports, among the main exporting countries over the last eleven years, while the other leaders experienced more modest paces of growth.

Export Prices by Country

The jersey export price in the European Union stood at $13 per unit in 2018, lowering by -4.4% against the previous year. Over the period under review, the jersey export price continues to indicate a relatively flat trend pattern. The pace of growth appeared the most rapid in 2017 when the export price increased by 17% against the previous year. The level of export price peaked at $15 per unit in 2008; however, from 2009 to 2018, export prices failed to regain their momentum.

Prices varied noticeably by the country of origin; the country with the highest price was Italy ($27 per unit), while Spain ($6.9 per unit) was amongst the lowest.

From 2007 to 2018, the most notable rate of growth in terms of prices was attained by Poland, while the other leaders experienced more modest paces of growth.

Imports in the EU

In 2018, approx. 2.7B units of jerseys, pullovers, cardigans and similar articles were imported in the European Union; growing by 7.3% against the previous year. The total import volume increased at an average annual rate of +2.9% over the period from 2007 to 2018; however, the trend pattern indicated some noticeable fluctuations being recorded throughout the analyzed period. The pace of growth was the most pronounced in 2008 when Imports increased by 16% year-to-year. The volume of imports peaked in 2018 and are expected to retain its growth in the immediate term.

In value terms, jersey imports stood at $22.6B in 2018. The total import value increased at an average annual rate of +1.9% from 2007 to 2018; however, the trend pattern remained relatively stable, with somewhat noticeable fluctuations being observed throughout the analyzed period. The most prominent rate of growth was recorded in 2008 when Imports increased by 19% y-o-y. The level of imports peaked in 2018 and are likely to see steady growth in the near future.

Imports by Country

Germany (598M units) and the UK (473M units) represented roughly 40% of total imports of jerseys, pullovers, cardigans and similar articles in 2018. France (305M units) ranks next in terms of the total imports with a 11% share, followed by Italy (9.6%), the Netherlands (6.6%), Spain (4.8%), Belgium (4.6%) and Poland (4.6%).

From 2007 to 2018, the most notable rate of growth in terms of imports, amongst the main importing countries, was attained by Poland, while the other leaders experienced more modest paces of growth.

In value terms, Germany ($5B), France ($3.2B) and the UK ($3.2B) constituted the countries with the highest levels of imports in 2018, with a combined 50% share of total imports. Italy, the Netherlands, Spain, Belgium and Poland lagged somewhat behind, together accounting for a further 32%.

Among the main importing countries, Poland experienced the highest rates of growth with regard to imports, over the last eleven year period, while the other leaders experienced more modest paces of growth.

Import Prices by Country

The jersey import price in the European Union stood at $8,501 per thousand units in 2018, coming down by -1.7% against the previous year. Overall, the jersey import price continues to indicate a relatively flat trend pattern. The most prominent rate of growth was recorded in 2011 an increase of 12% y-o-y. In that year, the import prices for jerseys, pullovers, cardigans and similar articles reached their peak level of $10,568 per thousand units. From 2012 to 2018, the growth in terms of the import prices for jerseys, pullovers, cardigans and similar articles failed to regain its momentum.

Prices varied noticeably by the country of destination; the country with the highest price was France ($10,555 per thousand units), while the UK ($6,731 per thousand units) was amongst the lowest.

From 2007 to 2018, the most notable rate of growth in terms of prices was attained by Poland, while the other leaders experienced more modest paces of growth.

Source: IndexBox AI Platform

FedEx

FEDEX, UPS, & AMAZON SCRAMBLING IN THE AIR FOR FAST, FREE SHIPPING

Christmas came in May for Amazon Prime subscribers, who were informed the platform’s tens of millions of items would be available for free same-day delivery and two-day shipping. 

“Prime Free One-Day is possible because we’ve been building our network for over 20 years,” reads a company statement. “This allows Amazon to work smarter based on decades of process improvement and innovation, and to deliver orders faster and more efficiently.” 

Customers reap the benefits as Rakuten Intelligence research shows that over the past two years, the time from purchase to delivery has been slashed from 5.2 days to 4.3 days on average. And yet, Amazon is faster still, at 3.2 days.

Other retailers took the Amazon news like a lump of coal, with Walmart scrambling to unveil free one-day shipping without a membership fee. Target already had such a program for card-carrying loyalty shoppers. FedEx revealed it was parting ways with Amazon for “strategic reasons.”

Meanwhile, industry watchers caution about the hidden baggage that comes with rapidly delivered packages.

Competition is Fierce

Despite the cheery one-day news, Amazon still faces competition from Walmart, which boasts more than 4,700 store locations and an extensive network of warehouses from which it can deliver packages. Another worthy contender is XPO Logistics, which is among the largest third-party logistics providers with 90 facilities across the country. 

During his December earnings call, FedEx CEO and founder Fred Smith said his company views Amazon “as a wonderful company and service and they’re a good customer of ours. We don’t see them as a peer competitor at this point in time.” 

Mere months later, FedEx severed ties with Amazon and partnered with Dollar General on package delivery services, with expectations to offer the service in more than 1,500 stores by late in the summer, building to over 8,000 stores by 2020. 

“We believe this move is an attempt to increase delivery density in lower population areas,” states the Morgan Stanley Research on the move. “… The Dollar General partnership follows a series of headlines including FDX’s AMZN customer loss, move to seven-day ground delivery, and incentive compensation modification ahead of their June 25th fourth quarter earnings release.

So much for not seeing Amazon as competition. FedEx’s annual report, which was released on July 16, mentioned Amazon six times and included this context: “We face intense competition.”

“[I]f customers, such as Amazon.com, further develop or expand internal capabilities for the services we provide, it will reduce our revenue and could negatively impact our financial condition and results of operations,” the FedEx report states. “News regarding such developments or expansions could also negatively impact the price of our common stock.”

And how is this for sounding completely opposite to what Smith had said just seven months prior? “[S]ome high volume package shippers, such as Amazon.com, are developing and implementing in-house delivery capabilities and utilizing independent contractors for deliveries, and may be considered competitors.”

Look! Up in the Sky!!

“Amazon.com is investing significant capital to establish a network of hubs, aircraft and vehicles,” the FedEx annual report notes.

That’s striking when you consider the far fewer times FedEx rival UPS is mentioned in the same report. Keep in mind that UPS currently has 564 cargo jets and thousands of facilities and fulfillment centers around the world, while Amazon has one air hub and options on 100 planes—by 2021, according to a June announcement. 

Ditching Amazon as an air customer led to FedEx slashing prices to fill its planes, according to numerous reports.

As the shipping giants fight for the skies, benefits are being reaped on the ground. Hillwood, developer of the 26,000-acre master-planned AllianceTexas development near Fort Worth, announced in June it has acquired control of 600 acres of additional contiguous land. Strategically located between Fort Worth Alliance Airport and the BNSF Railway Alliance Intermodal Facility, the new Alliance Westport property increases Hillwood’s potential for more manufacturing, large-scale logistics facilities and aviation sites adjacent to the airport’s recently expanded runways.

Alliance Westport is already home to more than 8 million square feet of industrial and aviation development, including key logistics facilities for UPS, FedEx and Amazon Air. When combined with BNSF Railway’s intermodal facility volumes, these three hubs will offer Alliance Westport customers unparalleled access to rail, highway and air shipping options, all within a one-mile radius. The railway and roads have direct routes to Mexico and expedited transit times to the West Coast ports of Los Angeles and Long Beach.

“This is one of the most significant land acquisitions in the history of AllianceTexas,” says Tony Creme, senior vice president of Hillwood. “As Alliance Airport and the BNSF Railway Alliance Intermodal Facility continue to expand and strengthen the foundation for AllianceTexas’ commercial growth, this new property in Alliance Westport will serve as a strategic link between these two pieces of critical logistics infrastructure and offer unparalleled connectivity to our customers.”

 But What About the Planet?

As efforts intensify to move products faster, speedy deliveries are taking a toll on the environment, according to Patrick Browne, director of Global Sustainability at UPS

“The time in transit has a direct relationship to the environmental impact,” Browne told CNN Business on July 15. “I don’t think the average consumer understands the environmental impact of having something tomorrow versus two days from now. The more time you give me, the more efficient I can be.”

A van schlepping goods to e-commerce customer doors does remove from the road the vehicles of those who would otherwise be driving to brick and mortar stores, but a 2012 University of Washington story found that advantage is erased if the delivery route begins far away and items are coming immediately, because the ability to lump orders together is diminished. 

Last-mile services such as Amazon Flex and Walmart’s Spark Delivery often deliver only a few items at once in personal vehicles or small vans. A new option called Amazon Day, which offers discounts and rewards to customers who choose “no-rush shipping,” does allow for the consolidation of orders, however.

Amazon’s competition can take solace in the fact that Amazon was already absorbing added costs for fast deliveries before the Prime one-day announcement, which included news of an additional $800 million investment in logistics infrastructure.

ENTREPRENEURS

ENTREPRENEURS ALLEGE AMAZON’S “UNSCRUPULOUS BUSINESS PRACTICES” FORCED CLOSED BUSINESSES

A group of companies in Los Angeles and surrounding areas that were part of Amazon’s Delivery Service Partner Program are suing the e-commerce giant, it was announced Aug. 5. 

Plaintiffs the Hubper Group Companies and their affiliates allege Breach of the Covenant of Good Faith and Fair Dealing, Breach of Implied Contract, Estoppel, Fraudulent Concealment, Unfair Business Practices and Intentional Interference with Business Relationship in the complaint filed in the Superior Court of Los Angeles by the Newport Beach, California-based law firm WHGC, P.L.C. 

They seek an unspecified amount in compensatory damages, disgorgement, plus exemplary and punitive damages from Amazon Logistics, which is accused of “wrongfully and without cause” terminating the plaintiffs’ Delivery Service Partner relationship this past April. That was after the Hubper Group Companies claims to have invested about $4.5 million into continuing its exclusive operations for Amazon, which included employing about 600 people to deliver good from nine stations covering 300 routes. 

Further, once Hubper Group Companies was put out of business, Amazon contacted the plaintiffs’ former drivers, offering employment as independent contractors utilizing the same delivery routes, according to the lawsuit.

“This is a clear-cut story of a corporate giant knowingly and deceitfully putting a group of local entrepreneurs out of business,” says a member of the plaintiffs’ legal team. “Amazon Logistics convinced these hard-working entrepreneurs to invest in a business that they knew would soon render worthless, a practice that is immoral, unethical, oppressive, unscrupulous and substantially injurious to consumers overall.”

e-commerce

Shipping Solutions Keep Pace with E-Commerce’s Global Reach

I recently came across a study in which 80 percent of executives from leading U.S. e-commerce companies said they considered expansion to international markets “critical” to future growth.  The survey also revealed that Canada, Western Europe and Asia account for most international sales from U.S. websites, followed by China and Japan.  

These findings are indicative of the “no-turning-back” mentality taking place among retailers, as the reality of the growing global e-commerce marketplace takes hold. U.S. retailers now look beyond their borders and see a world in which 80 percent of B2C e-commerce sales are taking place outside of North America, and in which consumers are increasingly open to shopping across borders.

International e-commerce sales have become so pervasive in fact, almost 60 percent of shoppers say they made an international purchase in the past six months. That number jumps to almost 63 percent for European consumers, and 58 percent for Asia-Pacific shoppers.

This is especially true within the lucrative U.S./Canada trade relationship, with as much as one-third of Canadian e-commerce purchases going to U.S. sites, and more than 60 percent of Canadians having made an international purchase in the last six months. 

Today consumers across the globe, including in emerging and developing countries, have unprecedented access to brands and product selections online. Consider, for example, that 75 percent of online shoppers in India and 61 percent of shoppers in Nigeria have made international purchases. It’s no wonder then the value of retail e-commerce is surging and projected to be valued at almost $5 trillion by 2021, just two years from now.

For smart retailers, the customers are there. The challenge is to connect with consumers in a way that aligns with their local customs and expectations to localize transactions and fine-tune the customer experience. And, since ensuring seamless deliveries is an important part of any customer experience, it’s essential to understand that international logistics resources are possible today that were unthinkable just a few years ago.

Meeting customer expectations – in every country

In thinking about satisfying expectations, a retailer will come to understand that the world’s consumers essentially want the same things when shopping online:  

  • Consistent inventory across all channels
  • Detailed product information 
  • Site navigation in their native languages
  • Prices listed in local currencies
  • Online payment/currency-conversion capability
  • Access to rebates and other savings incentives
  • Fast delivery – what they want, delivered when they want it.

A retailer must dedicate time to market research as a way to understand consumer preferences and dislikes.  You need to make sure there’s demand for your product, determine who your competitors are, and then find your competitive advantage. A good logistics strategy will be an integral part of that competitive advantage because seamless, on-time deliveries – and hassle-free returns – are among the most important deliverables for consumers all over the world.  

PriceWaterhouse Cooper’s 2019 Global Consumer Insights Survey asked consumers in 27 countries about their shipment expectations. Among the more interesting findings, is the impact mega-retailers including Amazon, Alibaba and Net-a-Porter have had in defining global consumer expectations. Global consumer expectations include free shipping (72 percent), free return shipping (65 percent), package tracking (54 percent) and same-day delivery (50 percent).

To accommodate these globally-shared expectations, international retailers are building logistics strategies that create the “look and feel” of a domestic delivery – despite being an ocean or a continent away.  Italian customers don’t really care if customs delays affected a shipment leaving the United States, or that bad weather over the Atlantic forced a shipment to be re-routed. They just want their packages delivered on time, as promised. Every time.

Behind the scenes, logistics providers are working to expand their international footprints, to ensure capabilities are in place to help businesses meet their delivery promises.  For example, my company recently announced a $1B investment in the future, including a new national hub set to open in Toronto in 2021.  You’ll find similar developments happening around the world.

Technology and innovation are also allowing logistics companies to provide levels of service that were unthinkable as recently as a few years ago. Some of those solutions include: 

-Customized solutions. Shipping companies can support a retailer by providing a wide range of options to build the best solution for a particular customer’s needs. Shippers have traditionally been bound by rigid carrier schedules; today, a solution can meet a specific need. For example, a shipment traveling from southern California to Ontario would benefit from direct linehaul service to the border, followed by induction into a Canadian distribution center. The direct linehaul could conceivably shave two to three days from a “traditional” Canada-bound schedule.

-Different modes of transportation. Hybrid solutions might integrate ground service with a rail or air component, depending on a particular situation. In fact, 2018 was a particularly strong year for intermodal volume on U.S. railroad, according to the Journal of Commerce.

-Expedited service. For shipments to Europe, Asia, Latin America, or even across North America, a retailer can take advantage of unprecedented expedited air solutions. We used to think of “expedited” as a solution reserved for extreme emergencies, but today, retailers increasingly rely on expedited air solutions because of its guaranteed, anywhere/anytime capabilities.

-Cross-border expertise. Efficiencies in customs management now make it possible for shipments to move swiftly across international borders. Experienced providers will ensure maximum efficiency in the clearance process, including assignment of the proper tariff classification code. Getting the tariff classification correct is important because an incorrect classification will delay a shipment, and shippers might pay a higher rate of duty. A report by the Auditor General of Canada found 20 percent of shipments arrive at the border with an improper code assigned! And since tariff classification is used to determine eligibility for free trade agreement benefits, an incorrect classification could cause the shipper to miss out on those savings as well.

E-commerce truly is the engine of future retail growth. And thanks to innovations in transportation efficiency, your access to the world’s customers has never been easier.

generation

What Buying Habits Tell Marketers About Each Generation

Each generation has unique experiences, lifestyles, and demographics that influence their buying behaviors, financial experts say. And studies show these distinguishing factors often lead to different spending habits between generations.
As a result, many companies are reaching out to consumers and trying to understand — and gain the attention of — these diverse buyers, says Gui Costin (www.guicostin.com), an entrepreneur, consultant and author of Millennials Are Not Aliens.
“This type of multi-generational marketing is the practice of appealing to the unique needs and behaviors of individuals within different generational groups,” says Costin. “In terms of finding and retaining buyers, companies cannot underestimate those generational differences.”
Costin discusses how the buying habits of different generations are influenced by environmental factors and how businesses must focus their marketing efforts accordingly:
Millennials. Now comprising the highest percentage of the workforce, this generation (born roughly from 1981 to 1995) receives considerable marketing attention. Many millennials grew up immersed in the digital world — a big difference from previous generations — and they think globally. “Attract this group early and earn its loyalty by appealing to their belief that they can make the future better,” Costin says. “Traditional mass marketing approaches do not work well with younger consumers. Be sure they know that your organization’s mission speaks to a purpose greater than the bottom line, e.g., globalization and climate change. Give them systematic feedback because they value positive reinforcement at accelerated rates and want more input.” 
Generation X. Following the baby boomers and preceding the millennials, their tastes are different from previous generations. “Because they have greater financial restraints, they often shop at value-oriented retailers,” Costin says. “On the other hand, they have a reputation of being incredibly disloyal to brands and companies. Generation Xers like initiatives that will make things more useful and practical. They demand trust to the extent that if your organization does not follow through once, then you are likely to lose them.”
Baby Boomers. This demographic group, with many now in retirement or nearing it, includes those born from 1946 to 1964. Health is a major concern, and change is not something they embrace. “They appreciate options and want quick fixes that require little change and instant improvement,” Costin says. “They do not like bureaucracy — but give them a cause to fight for and they will give their all. Focus on building value and they will be less price-sensitive. While this group may be aging, they’re focused on breaking the mold of what 60 and beyond looks like.” 
The Silent Generation. Born between 1925 and 1945, this group represents the oldest Americans and, Costin says, typically is labeled with traditional values such as discipline, self-denial, hard work, conformity, and financial conservatism. “It’s important to earn their trust,” says Costin, “as they believe that a person’s word is his or her bond. Patriotism, team-building, and sacrifice for the common good are appealing to this generation. As a group, they aren’t particularly interested in the information age; however, the younger members of this generation are one of the fastest-growing groups of internet users.”
“Communicating with customers in different generations can be challenging,” Costin says. “However, all generations appreciate honesty and authenticity. As environmental factors change, transparency and genuine interactions remain important to everyone.”

Gui Costin (www.guicostin.com), author of the No. 1 Bestseller Millennials Are Not Aliens, is an entrepreneur, and founder of Dakota, a company that sells and markets institutional investment strategies. Dakota is also the creator of two software products: Draft, a database that contains a highly curated group of qualified institutional investors; and Stage, a content platform built for institutional due diligence analysts where they can learn an in-depth amount about a variety of investment strategies without having to initially talk to someone. Dakota’s mission is to level the playing field for boutique investment managers so they can compete with bigger, more well-resourced investment firms.