Coming on the heels of the most e-commerce intensive Black Friday yet, Cyber Monday promises to be a big new test of whether physical retailers will succeed at managing surging online demand this holiday season.
Adobe Analytics, which tracks digital transactions on 80 major e-commerce sites, expects online sales could reach as much as $12.7 billion on Monday, up 35% from a year earlier. That is likely to further strain retailers coping with unusually high online sales this year.
As Fortune reported Friday, malls across the country were very quiet as shoppers stayed on the couch rather than dive into crowds at a time of surging COVID-19 infection rates. Indeed, according to RetailNext, the number of in-store shoppers on Black Friday was down by 48% from the previous year.
Instead shoppers went online: According to Adobe Analytics, online sales hit $9 billion Friday, a 22% increase over last year. That was below expectations because of retailers doling out online deals since mid-October, far earlier than usual.
And this year, once again, retailers are offering deep discounts on Cyber Monday on everything from televisions to Crock-Pots to Barbie Playsets. But this time around, it’s not only to compete with Amazon, whose sales rose 30% over the long weekend. For many retailers, this strategy is intended to bring sales forward as much as possible to reduce any surge in December that would lead to running out of stock and delayed packages.
“There is absolutely no way that the carriers will be able to keep up with the volume,” Moody’s vice president Charlie O’Shea tells Fortune. And so even as shoppers have been sifting through deals for weeks, they will turn out online on Monday because of that. “How early do I buy to make sure I get it, and am I going trust their ability to get it on time?” O’Shea continues.
Some in the industry have coined the term “shipageddon,” where there is simply no more capacity to ship any additional items. Salesforce has forecast some 5% of packages shipped between mid-November and Christmas Eve could be late because of demand outstripping capacity.
Abercrombie & Fitch, for instance, has told shoppers on its website that Dec. 4 is the cutoff to be sure items will arrive by Christmas Eve—unless they’re willing to pay extra shipping. Otherwise, they will be nudged to use curbside pickup.
Indeed, retailers like Target, Best Buy, and Walmart are banking on their expansive curbside pickup setup to save on shipping costs, provide online shoppers with additional options, and offer customers more certainty about getting their items. Those investments have paid off handsomely: In its most recent quarter, Best Buy saw online sales grow 174%, while at Target they rose 155%, and at Walmart they nearly doubled.
And so Cyber Monday won’t be anticlimactic despite the stream of deals in the last few weeks. Retailers want to get people shopping online now, given there are only three and a half weeks left before Christmas. Otherwise shoppers will have to pay more or risk not getting their items on time.
“Shoppers are encouraged to do their gift buying soon, as shipping in time for Christmas will get more expensive in the coming weeks,” says Taylor Schreiner, director at Adobe Digital Insights.
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This story was originally featured on Fortune.com