Get the latest market trends in your inbox

Stay on top of the latest market trends and economic insights with the Axios Markets newsletter. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Denver news in your inbox

Catch up on the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Des Moines news in your inbox

Catch up on the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Minneapolis-St. Paul news in your inbox

Catch up on the most important stories affecting your hometown with Axios Minneapolis-St. Paul

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tampa-St. Petersburg news in your inbox

Catch up on the most important stories affecting your hometown with Axios Tampa-St. Petersburg

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Illustration: Aïda Amer/Axios

The 2020 holiday buying season is expected to be like no other: An avalanche of ecommerce deliveries, merchants running promotions earlier than ever, and tight crowd controls on Black Friday.

Why it matters: Retailers desperately need the revenue from this critical time of year — and they fear that overwhelmed package-delivery services will leave their customers high and dry (and angry).

What's new: The pandemic is changing the dynamics of the annual gift-buying ritual.

  • More people than ever say they'll be buying most of their stuff online.
  • With Halloween expected to be a bit of a bust this year, more stores will put renewed emphasis on Christmas and other year-end holiday sales.
  • Target, Walmart and others have vowed to stay closed on Thanksgiving.

The intrigue: "All the traditional last-mile delivery carriers [like FedEx, UPS and DHL] will run out of capacity at some point in the season," predicts Caila Schwartz, a senior industry strategist at Salesforce Commerce Cloud. "So we anticipate that 700 million packages are actually at risk of being delayed this year."

  • Some retailers will offer 15% discounts to people who fulfill in the stores, she says.
  • 2020 is expected to be the biggest year yet for a trend called "click and collect" or "BOPUS" (buy online, pick up in store).
  • Returned gifts and packages are expected to reach record levels as well.

Both UPS and FedEx — already strained by the COVID-induced ecommerce boom — are proactively slapping fees on huge mailers like Amazon and Target, sometimes as much as $3 to $4 per package.

  • Schwartz predicts COVID-related mailing surcharges will amount to $4.5 billion.
  • This price tag could strain the margins of retailers, who may be reluctant to raise prices too much and turn customers off.
  • UPS says it has already been seeing holiday levels of demand, and hired 39,000 employees in Q2 to deal with it.
  • FedEx, meanwhile, "has limited the number of items that Kohl’s Corp. and about two dozen other retailers can ship from certain locations, as the delivery company tries to prevent its network from being overwhelmed during the coronavirus pandemic," per the WSJ.

What to watch: With so many Americans worried about their finances and fearful of entering physical stores, retailers may have to lower their expectations.

  • "Elections are not good for the retail economy," Karl Haller, an IBM retail expert, tells Axios. "The uncertainty about what the future holds tends to depress the desire to go out and spend on discretionary items."
  • According to IBM's annual retail survey, Americans will likely be buying more groceries, alcohol and building materials/home improvement supplies, and fewer personal electronics and clothes (except for athleisure).
  • As Haller put it: "We’ve got a polarizing election that’s going to boost liquor sales."

The bottom line: Experts advise getting your shopping done as early as you can.

Go deeper

Where Americans are opening their wallets

Reproduced from Mastercard; Note: Online survey conducted October 8-13, 2020 among 2,017 U.S. residents; Chart: Axios Visuals

Cities like Atlanta, Houston and Orlando helped buoy merchants' coffers in October, according to a snapshot from Mastercard, which looked at retail sales in the 20 largest U.S. metropolitan areas during the first 10 months of the year.

Why it matters: So far it looks like cities that stayed open the most during the pandemic notched bigger gains, according to Mastercard, which tracked all types of transactions (not just credit and debit cards).

USAID chief tests positive for coronavirus

An Air Force cargo jet delivers USAID supplies to Russia earlier this year. Photo: Mikhail Metzel/TASS via Getty Images

The acting administrator of the United States Agency for International Development informed senior staff Wednesday he has tested positive for coronavirus, two sources familiar with the call tell Axios.

Why it matters: John Barsa, who staffers say rarely wears a mask in their office, is the latest in a series of senior administration officials to contract the virus. His positive diagnosis comes amid broader turmoil at the agency following the election.

Bryan Walsh, author of Future
3 hours ago - Health

COVID-19 shows a bright future for vaccines

Illustration: Annelise Capossela/Axios

Promising results from COVID-19 vaccine trials offer hope not just that the pandemic could be ended sooner than expected, but that medicine itself may have a powerful new weapon.

Why it matters: Vaccines are, in the words of one expert, "the single most life-saving innovation ever," but progress had slowed in recent years. New gene-based technology that sped the arrival of the COVID vaccine will boost the overall field, and could even extend to mass killers like cancer.