Retailers fulfill more holiday deliveries promises

Discussion
Jan 05, 2015

Apparently with little help from Rudolph, last-minute Christmas packages arrived largely on time this year.

According to a survey of 160 orders placed by StellaService, only seven percent of packages ordered online did not arrive by their promised delivery date, compared with 12 percent in 2013. Only 23 percent of the 40 online retailers tested missed at least one delivery this year, compared to 32 percent of the 25 retailers tested in 2013.

Kurt Salmon found 13 percent of the nearly 100 e-commerce orders it surveyed did not make it in time for Christmas, down from 15 percent in 2013. Overall, 78 percent of the 50 retailers Kurt Salmon tested made Christmas Eve delivery, up from 59 percent last year.

In 2013, a flood of last-minute orders and poor weather overwhelmed carriers and led to some 2 million express packages not arriving by Christmas Eve, according to ShipMatrix.

The improved performance this year was attributed to investments in logistics infrastructure by both major carriers and retailers as well as improved communication between the two sides. Better weather and fewer last-minute deals also helped.

Kurt Salmon faulted none of the late deliveries to the carriers. The consultancy attributed 25 percent of late deliveries to inventory issues, up from 13 percent last year, with the rise attributed to the expansion of programs such as buy online, in-store pickup. Other issues included retailers neglecting to upgrade orders that could have been air-shipped and retailers not alerting carriers early enough that packages were ready for pickup.

"Those retailers that were on their game did extremely well," Steve Osburn, retail strategist at Kurt Salmon, told CNBC. "There was a lot of money spent this year by FedEx, UPS and all the retailers involved."

StellaService likewise attributed the gains largely to better efficiencies at retailers’ distribution centers, with many fulfilling orders in the same day they were received.

Nine retailers Best Buy, Costco, Crate & Barrel, J.C. Penney, Kohl’s, Macy’s, Staples, Toys "R" Us and Wayfair all missed at least one delivery, according to the StellaService survey. Staples, Macy’s and Kohl’s missed a delivery both years.

But StellaService did find that the ones with the most aggressive cutoff date of Dec. 23 Apple, Dell, Nordstrom and Zappos all made their deadlines. Kurt Salmon in its survey likewise applauded Nordstrom and Zappos as well as Staples and REI for meeting Dec. 23-cutoff dates.

Will the improved on-time delivery performance this holiday encourage retailers to push the envelope on last-minute cut-off dates for 2015? Where would you recommend retailers and carriers concentrate further efforts to reduce delivery failures?

Please practice The RetailWire Golden Rule when submitting your comments.

Join the Discussion!

10 Comments on "Retailers fulfill more holiday deliveries promises"


Sort by:   newest | oldest | most voted
Gene Detroyer
Guest
7 years 4 months ago

I believe the retailers would be foolish to push the envelope on the last-minute cut-off, and I don’t think they will. I think the problem will be with the customers. If they were successful with procrastination this year, they will only be encouraged to procrastinate further next year. The challenge will be more volume shifting to the end of the season and with more volume, bigger challenges.

Max Goldberg
Guest
7 years 4 months ago

As long as consumers are spending, retailers will try to deliver their purchases in time for the holidays. Improved logistics, better inventory controls and more delivery options all contributed to 2014’s successes. That said, one winter storm would throw a significant monkey wrench into the system, and there is little any logician can do to beat Mother Nature.

Ed Rosenbaum
Guest
7 years 4 months ago

After reviewing the success the cut-off date had this year and the obstacles faced in 2013, there is little doubt the cut-off date will become a priority. Successful moves by one company become the moves of the other companies in future years. Just like football, when one team does something successfully the others follow.

Al McClain
Guest
Al McClain
7 years 4 months ago

Infrastructure improvements notwithstanding, I’m guessing more deliveries were on time this holiday than last mainly due to the weather. The weather at the tail end of 2013 was awful a lot of places and pretty nice in most of those same places at the end of 2014. Retailers will no doubt try to push out last-minute cut-off dates to the last possible second next year, but one big storm will leave a lot of unhappy customers, and fingers will be pointed in many directions.

Robert DiPietro
Guest
7 years 4 months ago

Retailers will push the issue once the memory of the last failure fades, probably another year away as the lure of last-minute sales is too great.

The biggest focus is working with the carriers and ensuring real-time notifications and multiple pickups through out the peak days.

Shep Hyken
Guest
7 years 4 months ago
So this year only 7 percent of deliveries were late, versus 12 percent the year before. Yippee! I don’t think so! In my mind, still not very good numbers. The silver lining of this cloud is that late deliveries were due to inventory issues and not carrier issues. So I’ll make the same statement I made last year when the carriers said they weren’t prepared for volume or weather issues: Noah built the Ark before it rained. In other words, be ready. Prepare for the heavy volume of holiday shoppers. If inventory is the issue, then you’ve potentially blown future opportunities with your customers. According to the article, Zappos, Apple, Dell, Nordstrom and others “pushed the envelope” and met their deadlines. They set the bar. The customer’s expectations are what they are because others are capable, so why shouldn’t everyone else be. The last question is about retailers and carriers concentrating their efforts on reducing delivery failures. The question this raises is: Do you want your customer to have a good experience with you or… Read more »
Nikki Baird
Guest
Nikki Baird
7 years 4 months ago
I think if anything, this year proves that it’s important to do several things to ensure no missed promises. One, build as much speed into your fulfillment process as possible. I think retailers already get this. It’s already a huge priority to shorten the amount of time from the order confirmation to the shipment confirmation to ensure they get it out the door quickly. Two, be as flexible as possible and pay attention to changing conditions. I guess we lucked out this year weather-wise, but it seemed like everyone paid much closer attention to shifting conditions, and didn’t rely entirely on throwing it over the wall to logistics providers to deal with those issues. I would also like to think that ship-from-store options at more retailers made it easier to take some risk out of delivery timelines, but I haven’t heard that for sure. Three, work more closely with partners. This year UPS and FedEx both operated almost like a CPFR partner, asking retailers to forecast their volumes and working more closely to guarantee capacity… Read more »
Arie Shpanya
Guest
7 years 4 months ago

I don’t think for a second that 2014’s improvements will lead to closer to Christmas cut off dates. The retailers that were able to succeed (and eliminate late arrivals) had four things in common: deals earlier in the holiday season, a set cut off date, well planned inventory, and same day handling. These aspects should be the standard next year to make delivery failures a thing of the past.

Christina Ellwood
Guest
Christina Ellwood
7 years 4 months ago

No. It is worse for retailers to disappoint customers by missing Christmas deliveries. Also, offering pickup in-store alleviates the pressure for some last-minute shoppers.

Kelly Tackett
Guest
7 years 4 months ago

Probably…but with many promising Christmas delivery with a cutoff of Dec 22, I just don’t think there’s a lot of wiggle room left and too many factors that can go wrong.

With a few notable exceptions, we are still a ways out from same-day delivery being a viable model for retailers. For now, BOPIS remains the best, though not perfect, alternative for last-minute shoppers.

wpDiscuz

Take Our Instant Poll

What’s the likelihood that Dec. 23rd cut-off dates will be pervasive by next year?

View Results

Loading ... Loading ...