As holiday nears, retailers feel burden to deliver on time
The pressure to deliver for online shoppers is on.
With Christmas on a Monday, most retailers have one less day to get packages delivered on time. Some are pushing up their deadlines for standard delivery or free shipping. And after promoting the convenience of buying online with store pickup, retailers are also trying to satisfy lots of customers coming in to collect their orders.
It’s especially important for retailers to hit the mark after some missteps earlier in the season, and because online leader Amazon has the advantage of delivering on Sundays. Research firm StellaService says Dec. 19 is the most popular cutoff date for retailers, two days earlier than last year. Amazon Prime members, meanwhile, get same-day delivery up until Dec. 24 in 8,000 cities.
Retailers have been trying to speed up delivery as they try to replicate the service offered by Amazon. But UPS said this month that some package deliveries were being delayed because of a surge of orders from online shoppers after Thanksgiving. And Walmart said around the same time that more online buying created delays in some orders.
Holiday spending is turning out to be stronger than expected, putting more pressure on stores to get it right.
Retailers are wrapping their arms around e-commerce fulfillment but “are still struggling,” said Alex Vlasto, vice president of marketing at StellaService.
The company found a marked decrease in how quickly retailers responded to queries from customers via chat message or phone during the first big shopping weekend of the season. For the 30 retailers it monitored from Thanksgiving to Cyber Monday, the average response time from a live customer service representative was three minutes and 14 seconds, compared with less than two minutes a year ago. Responses via chat took nearly two minutes, compared with just over a minute a year ago.
Shoppers seem ready to spend. Government data shows U.S. consumers went on a shopping binge last month as the holiday season began, with big increases among online retailers, electronics stores and furniture stores.
Technology firm First Data says that retail spending, which excludes grocery stores, restaurants, auto parts merchants and gas stations, rose 5.4 percent for the period Nov. 1 through Dec. 11, compared to last year’s growth of 2 percent. Adobe Analytics, the research arm of software maker Adobe, says online sales have soared nearly 15 percent this year, reaching $65.15 billion from Nov. 1 through Dec. 5.
Delivery has been one of the biggest battlegrounds as online shoppers seek speed and convenience. Target said this week it is paying $550 million to buy Shipt, which charges members $99 a year and sends people out to choose and deliver groceries from stores, after earlier this year buying a delivery logistics company to offer sameday service to in-store shoppers in New York City.
Amazon has long invested in an infrastructure to do Sunday deliveries, relying on the U.S. Postal Service and its own network of local couriers. For Amazon’s same-day deliveries for Prime members, it uses local couriers, the company said. Vlasto says the decision by most retailers not to do Sunday deliveries comes down to cost and the limits of their current logistics.