Millennial consumerism is driving delivery services
How do Millennials like to shop? As almost all successful retailers will tell you, the answer to that is online. That doesn’t necessarily mean that brick-and-mortar is done for – there’s still a place to experiment with products that you want to try before you buy, and “experience” is the new watchword on the high street, where big brands are trying to reinvent how they connect with consumers.
But it does mean that a majority of easy purchases that would have once taken place offline (think books, DIY equipment, computer games, etc.) are now almost all made online. And there’s a knock-on effect from all that ecommerce: delivery services are busier than they’ve ever been.
So far this year, FedEx’s share price has risen by 7%
Source: Yahoo Finance
In 2018, the US market for “last-mile” deliveries – that’s the final stretch of the package’s journey, usually handled by companies like FedEx or UPS – was up 10% year on year, to $8.9 billion. That growth is being driven by retailers all over the country who are embracing online sales – through third-party platforms like Amazon Marketplace or Shopify – and need a ready-made logistics solution for delivery.
FedEx – as well as its competitors – are working hard to live up to the challenge. And if FedEx’s recent holiday season was anything to go by, then the company is well-positioned to deliver on its goals. In December, the company’s CEO Raj Subramaniam, made the following comment over the three-month period just gone:
“We are extremely proud of the excellent service levels that we achieved this peak season, especially given the increase in volumes.” He added that the end of 2018 was “yet another record peak season for FedEx,” and noted that 98% of parcel deliveries in the period were on time!
Dominion holds FedEx in its Global Trends Ecommerce Fund.
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