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Following the largest day of online shopping ever on Cyber Monday, hundreds of millions of packages have by now reached doorsteps across the US.
But an untold number of those deliveries have also likely found themselves snatched up by someone other than the person to whom they belong.
Now, one startup is launching a service to insure shoppers against these so-called porch pirates.
"We want our service to be used by the consumer when they need us," PorchPals CEO James Moore told Business Insider, "You know, when those Christmas gifts get stolen, that or that Xbox, or that PlayStation, or that pair of Nikes that cost you $300."
The service, which officially goes live on Monday, covers up to three stolen packages a year or a maximum claim of $2,000 for an annual fee of $120. Customers link their payment card to the service and all future e-commerce purchases made with that card are covered, the company says.
As with any insurance product, there is some surprisingly tricky math that goes into putting a tidy number on such a messy problem like parcel theft.
Moore told BI that PorchPals used three separate actuarial teams working independently on the problem to reach a comparable risk profile. The teams represented some industry heavy-hitters, including Lockton Re, Pinnacle Actuarial Resources, and PorchPal's underwriters at Lloyds of London's Newline Syndicate.
Over the past year, more than 58 million Americans are estimated to have had one or more packages stolen, according to a recent survey from tech reviews website Security.org.
Of course, some households experience multiple thefts, and PorchPals estimates the number of stolen packages at around 119 million last year.
In an earlier trial in California, Moore said PorchPals users typically used the service for packages worth between $250 and $280. That figure represents an unfortunate sweet spot in the world of missing parcels: Shipments worth $2,000 or more tend to require a signature at delivery, and refunds for less than $50 can often be processed without too much hassle by retailers who want to keep their customers happy.
Once the value gets above a hundred bucks, police reports and other documentation can start complicating the picture.
The Security.org survey found the median package value that customers reported to law enforcement was $195, while the median value of unreported packages was $50.
Those higher-value losses can lead to a loop of calls to retailers, delivery companies, local police, and back again.
"At some point you've called everybody," Moore said.
Moore said shoppers may not realize how impractical other forms of protection really are in the case of package theft. For instance, homeowner and renters insurance policies typically have higher deductibles than make sense for a $250 claim. Credit card policies can have requirements that packages be reasonably protected against theft, he said.
From a risk perspective, Moore said the nature of package theft makes it different from other property crimes, such as how ZIP code crime rates can affect auto insurance premiums.
"It's not the ZIP codes that you'd think," he said. "In porch theft it's different. The thief is looking for high-dollar items."
Porch pirates may steal from all income levels, but Moore says some of the more expensive packages are snagged from wealthier doorsteps that might otherwise have "this aura of safety," such as gated communities or luxury condos with a concierge desk.
"The number of packages just sitting out there, just left to the open… I mean, it's vast," he said.
Dan Whateley/Business Insider.
Social platforms have spent years trying to get Americans to buy stuff from videos, posts, and livestreams. That bet seems to finally be paying off.
The 2024 holiday sales from social media — driven by TikTok Shop and influencer affiliates, among other factors — show how far social shopping has come in the past five years.
TikTok Shop, which had its official wide launch in the US in September 2023, reported $100 million in single-day US sales on Black Friday this year, triple what it drove in 2023. Americans viewed over 30,000 TikTok shopping livestreams that day, with one creator picking up $2 million in sales from a single session.
The company's holiday gold rush didn't come easily. TikTok and its owner ByteDance have spent years investing in its e-commerce business, even as competitors like Instagram have pulled back on shopping features.
TikTok began testing out social-commerce features in the US as early as 2020 when it let creators add shopping buttons to some videos. It began rolling out its more advanced product, Shop, in the US to a group of merchants and agencies in November 2022 after testing in other markets like the UK. It's since built out its own order fulfillment program, enlisted hundreds of outside partners to train merchants and creators on how to sell in-app, and recently began connecting creators with manufacturers to build their own products.
TikTok likely wants to replicate some of the success of its sister app in China, Douyin, which drives hundreds of billions in sales annually, often via influencer livestreams. While TikTok's numbers are comparatively small, the company has made a ton of progress this year, social-commerce executives told Business Insider.
Max Benator, the CEO of the social-shopping agency Orca, said he expects to hit just under $100 million in total gross merchandise value, or GMV, in 2024 across the company's clients, a roughly 10X increase from 2023.
"We've now been on TikTok Shop since the very beginning, and we've seen successes gradually and consistently increase month over month," Benator told BI. "The numbers are serious."
Outlandish, a TikTok Shop agency that recently opened a livestreaming hub in Santa Monica, said its Shop sellers earned $48 million in US sales in November, up from $20 million in October. The company is betting that live shopping will continue to gain traction in the US, as it has in more mature social-commerce markets like China.
"It's QVC on steroids," Outlandish's founder and CEO William August told BI.
Amanda Perelli/Business Insider.
TikTok Shop's holiday performance was impressive for an e-commerce newcomer, but its business remains a small piece of overall holiday sales.
Total online Black Friday sales in the US hit $10.8 billion this year, up about 10% from 2023, according to Adobe Analytics. Online sales in the US between November 1 and December 2 reached $131.5 billion, and hit $13.3 billion on Cyber Monday alone.
Retailers like Amazon, Walmart, and Target continue to dominate much of online spending, but social-media influencers and other affiliate marketers are playing an increasingly important role in driving purchases on those platforms.
About 20% of US e-commerce revenue on Cyber Monday arrived via affiliate or other promotional links, a 7% year-over-year increase from 2023, per Adobe Analytics.
Outside TikTok and affiliate marketing, other influencer-focused platforms are also reporting meaningful sales volume this year. Live shopping platform Whatnot said in November that it had surpassed $2 billion in year-to-date livestream sales, for example.
When TikTok and competitors like Instagram and YouTube first began testing e-commerce features in the US, not all consumers were psyched.
Social media is for entertainment, not shopping, some said. Amazon and other big retailers have long dominated e-commerce, and changing consumer habits is a challenge. Instagram backpedaled on its shopping product last year, removing its Shop tab in February 2023 and eventually partnering with Amazon for its in-app shopping strategy.
But TikTok kept charging forward with social shopping. It enlisted an army of agency partners and livestream coaches to accelerate the adoption of Shop and flooded its feed with videos of creators hawking goods in exchange for a commission.
TikTok's owner ByteDance was likely behind the company's determination to make social shopping work as it sought to bring Douyin's success to TikTok.
Dan Whateley.
Now that live shopping and social commerce are beginning to take hold in the US, TikTok and ByteDance's push into the category is paying off (though it all could fall apart if TikTok ends up being banned in January due to a divest-or-ban law).
"This is the year that we've seen the real beginning of live shopping in America," said Julian Reis, the CEO of SuperOrdinary, a social-commerce agency that's worked with TikTok and Douyin. "With TikTok, we've had the first real foray into building an ecosystem that ties in entertainment and live shopping together, and a full-service ecosystem that brings in the creators, the affiliates, the products, the brands altogether."
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Cyber Monday was officially the biggest online-shopping day ever, according to fresh data from Adobe and Salesforce.
Depending on which you ask, US shoppers spent $13.3 billion (per Adobe) or $12.8 billion (per Salesforce) on Monday alone. In both cases, this year's number was up by a low-single-digit percentage from last year's marquee digital-sales day, which set the previous online-shopping record.
"It is a top discounting day," Salesforce's director of consumer insights, Caila Schwartz, told Business Insider. "It was one of the better days for online discounting compared to the rest of the week."
Deep markdowns in categories like electronics (30% off on average, tracked by Adobe) or apparel (39% off on average, tracked by Salesforce) encouraged inflation-pressured shoppers to spend more.
Meanwhile, others splurged on luxury goods and other big-ticket items that they'd been saving for since earlier year and planning to purchase during this holiday event, Schwartz said, citing customer surveys.
Taken together, the focus on deals and more carefully planned purchases suggest a shopper still stressed by high prices but nevertheless willing to spend during key moments — a profile that echoes recent remarks from major retailers' earnings calls.
The average order value on Cyber Monday rang in at $124 per transaction and included 3.5 items, Salesforce found.
As expected, shoppers increasingly used their phones to find and buy items, with more than three-quarters of website visits coming from mobile devices, Salesforce said. Mobile sales accounted for more than half of the Cyber Monday total, Adobe found.
"We're seeing that the consumer is getting a lot more comfortable not only doing research and browsing from their phones but also transacting from their phones for those bigger ticket items," Salesforce's Schwartz said.
"With those larger purchases — luxury electronics, even furniture and appliances — the mobile experience is getting a lot better, more intuitive," she added.
Online shoppers were also busier than usual in the days leading up to Monday — now called Cyber Week — with Thanksgiving and Black Friday seeing considerable sales growth over last year.
"Early discounts were strong enough that many consumers felt comfortable hitting the buy button earlier during Cyber Week, with Cyber Monday becoming 'last call' for shoppers to take advantage of big holiday deals," Adobe Digital Insights' lead analyst, Vivek Pandya, said in a statement.
The biggest discounts appear to be over, but some markdowns remain, and the sales so far signal a strong start to retail's holiday season.
Adobe expects total US holiday sales this year to top $240 billion, up 8.4% from last year. Salesforce's forecasts are closer to 8% growth for the period.
"We're still on track for another record-breaking digital holiday season," Schwartz said.
Amanda Perelli/Business Insider.
TikTok's second Black Friday in the US shows it's starting to drive real holiday spending, even though it remains a small fraction of overall e-commerce activity.
On Friday, the company drove over $100 million in US sales on its e-commerce platform Shop, a company spokesperson told Business Insider. Shoppers tuned into over 30,000 live-selling sessions on the app that day, with the content creator and Canvas Beauty founder Stormi Steele earning $2 million in a single livestream, the spokesperson said. A representative for Canvas Beauty confirmed the livestream figure and said the company sold over 100,000 products and grossed more than $3 million across all sales during Black Friday.
Live shopping is a major focus at TikTok. The company has been pushing its sellers and creators to test out the format, which drives billions in sales in more established social-shopping markets like China.
Nico Le Bourgeois, TikTok Shop's head of US operations, told BI in late October that he hoped live shopping would break through this holiday season.
"We want people to discover new products," Le Bourgeois said. "To be surprised. To feel like shopping can be different. And as a part of that, if we can have many customers shop in live and realize that this is really cool, I think we will have done a good job."
The most popular Black Friday product categories were fashion, beauty, and home, the TikTok spokesperson said. Other top sellers on TikTok Shop's Black Friday were Tarte Cosmetics and lifestyle retailer Miniso, they added.
Overall, TikTok's sales were a small piece of the holiday shopping pie. Black Friday sales in the US hit $10.8 billion on Friday, a roughly 10% increase from 2023, according to Adobe Analytics.
Last year, across the full US holiday shopping season, Amazon drove around $104 billion in US holiday sales, while Walmart hit about $20 billion in US e-commerce sales during that holiday period, according to eMarketer estimates.
TikTok Shop is still a relative newcomer in the e-commerce world, having launched in the US in the fall of 2023. Established retailers like Amazon, Walmart, and Target, which offered millions of holiday deals throughout November, likely drove a good chunk of overall US Black Friday activity.
Still, TikTok has been gaining traction in the US in recent months, particularly among young adults. The company invested heavily in its product over the last two years. Its parent company, ByteDance, likely hopes to replicate the social-shopping success of TikTok's sister app in China, Douyin, which drives billions in annual sales.
TikTok did not release US Black Friday sales data last year. But sellers told BI that some smaller and midsize brands saw big returns during the holiday event, while some larger brands were hesitant to test out a new platform during a critical earnings period.
In 2024, TikTok appears to have drawn in a wider variety of sellers to join its holiday push, which runs between November 13 and 28. TikTok Shop featured holiday discounts from brands like electronics maker Phillips, Fenty Beauty, and Maybelline NY, for example.
Ultimately, TikTok's e-commerce momentum could be abruptly cut off if the company ends up being sold or removed from app stores in early 2024 due to a law set by Congress that comes due in January.
Happy Thanksgiving to you all. As the holiday season approaches, finding the perfect tech gifts without breaking the bank is always a challenge for many. The pressure to find the right present at the right price is enormous. With a […]
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