Delivery promises
Can retailers fulfill pledge of one-day shipping?
Amazon, Walmart promise more deliveries within 24 hours of clicking “Buy.”/
This year, holiday stress may take on a whole new meaning for online retailers.
Amazon, Walmart and others have promised to deliver more of their orders within 24 hours of customers clicking on “Buy.”
The coming weeks will be the first test of whether they can make that happen during the busy holiday shopping season, when onslaughts of orders and bad weather can lay waste to even the best delivery plans.
It’s an expensive feat that requires not just additional planes and vehicles, but more workers and reams of data to help retailers prepare and predict what shoppers may buy.
And the stakes to deliver on time are high. A late package can damage a retailer’s reputation, since shoppers tend to blame them, even if the late arrival is the fault of the delivery company.
“The store made the promise,” said Suketu Gandhi, partner in the digital transformation practice at consulting firm A.T. Kearney.
Amazon learned that six years ago, when UPS and Fedex were crippled by bad weather and last-minute online shopping, causing millions of packages to be late for Christmas. Since then, the online shopping giant has been building its own delivery network to give it more control over when and how its packages are delivered. It has leased jets, built package-sorting hubs at airports and launched a program that lets contractors start businesses delivering packages in vans.
Others are feeling the pressure to keep up with Amazon. When the company introduced two-day shipping about 14 years ago, shoppers expected the same from other stores. That appears to be happening again.
“Customers love twoday delivery,” said Mark Cohen, a retail studies professor at New York’s Columbia Business School. “But they like one-day better.”
Smaller retailers, however, will probably be hurt trying to pay for quicker shipping, said Cohen, who used to be an executive at Sears Canada.
The push for even speedier delivery comes after Amazon announced in April that it would cut its delivery for Prime members to one day from two. Walmart and Best Buy followed with their own announcements. Many smaller retailers are also trying to deliver more quickly, according to UPS, which said it will have 11 more jets f lying this year to keep up.
But many eyes will be on Amazon this holiday season and whether it will keep its delivery promises. That’s because 42% of all online sales this holiday season are expected to go to the Seattle company, according consulting firm Bain & Co.
It says it’s up to the challenge. “We deliver for our customers every day and are confident in our ability to serve customers this holiday season,” Amazon said in a statement.