December 18, 2014
The last-minute holiday battle
Despite last year’s challenges filling last-minute orders, most of the major retailers this season are offering aggressive online cutoff dates for meeting Dec. 24-delivery guarantees. Retailers with brick & mortar stores are competing with cutoff times for Christmas-Eve in-store pickup.
On Tuesday, Amazon said it was extending its free shipping deadline to Dec. 19 (with purchase of at least $35) for guaranteed Dec. 24 delivery. Last year, the free-shipping cutoff was Dec. 17.
The shipping extension is possible due to Amazon’s growing network of fulfillment and sorting centers and its relationship with carriers, including UPS, FedEx and the U.S. Postal Service, Amazon told USA Today. In 2013, a flood of last-minute orders and poor weather in key hubs around the country overwhelmed UPS and FedEx, causing many packages to arrive after Christmas. The two major delivery giants as well as USPS have been making investments and arrangements to manage late shipments this year.
Amazon offers a number of other options for procrastinators:
- Dec. 22: Two day shipping (free with Amazon Prime)
- Dec. 23: One-day shipping (as low as $2.99 with Amazon Prime)
- Dec. 24: Same-day delivery ($5.99 per shipment) in 12 major metro areas as long as orders are placed by 10 a.m. local time.
Best Buy has an equally-aggressive strategy — free two-day shipping on Dec. 22 on thousands of items (on orders of at least $35). Orders must be submitted by 10:30 a.m. C.T. and eligible items are spelled out on Best Buy’s website. They exclude music and movies, which have to be ordered by Dec. 19. For in-store pickup on Dec. 24, orders must made be 4 p.m.
Target has set a cutoff of Dec. 20 for Dec. 24/free delivery with no stipulation on eligible items. Of the brick & mortar stores, it has the latest Dec. 24 in-store pickup cut-off at 5:00 p.m.
The tamest approach is being taken by Walmart, which set Dec. 17 as the last day for free shipping for guaranteed Dec. 24 delivery (orders of $50 or more). Last year, any order over $35 placed online by Dec. 19 earned free shipping and guaranteed delivery. The retailer is charging standard rates ($4.97 for orders over $50) on Dec. 19 as well as Expedited and Rush fees until Dec. 22 for Dec. 24 delivery. Similarly conservatively, online orders for Dec. 24 in-store pickup at Walmart have to be made on Dec. 23.
- Plenty of Time to Order Online: Amazon Extends Free Shipping Order Cutoff to Dec. 19 – Amazon
- Procrastinators, rejoice! Amazon extends Christmas shipping – USA Today
- Save the Date: Walmart Celebrates 12/13/14 with New Sequence of Savings – Walmart
- Target Offers Shoppers Convenience and Great Deals on Top Gifts During Final Week of Holiday Season – Target
- Best Buy Holiday Shipping Terms – Best Buy
BrainTrust
Recent Discussions
Discussion Questions
Are stores playing with fire offering aggressive cutoff dates for guaranteed Dec. 24 delivery of online orders? Do you see late cutoff times for in-store pickup as less risky for retailers?
Poll
BOPIS is less risky only if the brick-and-mortar store has the item that the customer wants. It’s likely that online shoppers will start to see limited availability in stores as assortments start to break before Christmas. This puts the expectation back onto the e-commerce fulfillment capacity, so there is some risk involved in over-reliance on BOPIS.
Are retailers playing with fire? Of course, but it’s not a surprise that everyone wants to be the “last one standing” with the latest possible order dates and the best shot at a little more market share. Hopefully the weather over the next week will be less disruptive than in 2013—and the retailers have had a year to plan and partner more effectively with the major carriers.
There is always a risk from over promising and under delivering. However, the pure online players like Amazon have built their business on timely delivery as evidenced by Amazon Prime.
Those offering online with brick-and-mortar run the risk of missing promised deadlines for shipping to the home. However, store pickup might ameliorate some of these concerns, while driving the shopper into the store for one last rush.
Yes—but they have to.
Late shipping date guarantees have become the omni-channel equivalent of extended store hours. Because shoppers habitually procrastinate, retailers know there is a percentage of the season’s sales to be had by being the last/most convenient option available. (As a long-time Christmas Eve mall jewelry store rat—believe me, I know.)
But the new wrinkle for retailers is that they are involving a third party (or multiple third parties) in their customer experience with delivery. Store hours, employee schedules and in-store inventories all look like an operational breeze when compared to third-party logistics.
But retailers and logistics companies will work this out. They have to. They have made it the new normal of omni-shopping and there is no turning back.
The devil of retail has always been in the details. The future devil will be the supply chain and logistics beyond the retailer’s domain and control.
Today’s consumers are increasingly spoiled with consistently good delivery in non-peak traffic periods. The holidays put all systems under stress. Two-day delivery before Christmas is risky—witness last year. Guaranteed delivery on the 24th with shipping as late as the 22nd is playing with the fire gods.
Retailers in stores and online still do not control the weather. All it will take is a significant winter storm and there will be a lot of disappointed consumers.
This is a double-edged sword for retailers. Consumers want to wait until the last minute to order due to procrastination or to take advantage of deals, while retailers want to squeeze every possible transaction out of the holidays. Any disruption in service, like last winter’s storm, could bring down delivery systems, resulting in consumer frustration and anger.
Some retailers hope that buy online pick-up in store will alleviate some potential headaches. To do this retailers need to have real-time knowledge of their inventories in warehouses and stores.
It’s all a roll of the dice. Logistics, inventory management and weather will all play a role.
In-store pick-up orders are less risky, if the inventory is on hand. If the systems set up in-store are done right, I don’t see any problems with this. Specialty orders for meat and deli catering services would probably require extra time. My cut-off for deli or bakery items is this Saturday the 19th.
As far as online, if the weather cooperates, no problem. If we get bad snowy weather, then mother nature wins again, and surely some deliveries will be late for Christmas.
Certainly retalers are rolling the dice with these cut-off extensions. But there was plenty of opportunity to learn from last year’s problems and a lot of time to make the necessary changes. Those that have done so will win.
In addition to weather, the other large gamble is consumer behavior. I don’t think it’s just a wait-for-the-best-deal mentality, i.e., what retailers have been conditioning them to do. I think there has been a slow drag on personal productivity, if you will. Procrastination is rampant in business and personal communications. And isn’t online commerce another form of communication?
They did last year and I am betting a significant percentage will experience issues again this year, but with Amazon reducing its dependency on UPS and FedEx maybe the extra capacity freed up and their capacity planning based on last year’s issues will help minimize this.
Only if stores can guarantee inventory, and accurately managing in-store inventory management is still a work in progress. Think of a customer who relies on this and shows up in-store late on 12/24 only to find their order can’t be fulfilled as inventory can’t be located. Ouch. Stores need to be careful what they promise and make sure they can meet expectations.
Late cutoff times for in-store pickup is less risky for retailers, assuming their inventory systems are accurate. And even if they aren’t and retailers can’t fulfill the order in-store, they at least have the opportunity to mollify consumers by offering an alternative item from current stock (likely with a big discount to demonstrate goodwill). With home delivery, if the item doesn’t make it, it just doesn’t make it. There’s no backup, no second chance to make it right.
Late deadlines are definitely a roll of the dice, but Amazon has changed the stakes for traditional retailers. Let’s hope, though, that consumers demonstrate better judgment than they did last year. After all, Christmas is December 25th every year.
In store pick up is less risky. Hopefully the item is already in stock at the pickup location and it is a matter of setting it aside for the customers. If not, then the retailer has control through its distribution system to get the time(s) to the right location. That being said, I do believe the stores are making big bets that may not pay off.
On the other hand, for all the discussion of increased sales, I am still seeing a great deal of merchandise in the stores. Either the reports are wrong or inventory levels have been increased. Either way the after holiday sales should be huge.
Sure there’s a significant risk of disappointment to shoppers, and last year’s experience should give retailers pause. There is a cold argument, however, for just capturing those extra sales. If most of them are delivered on time, that’s great. The rest still get paid for and you can apologize later.
Shoppers have a pretty good idea that last-minute delivery orders are more subject to screw-ups and weather-related delays. I suspect the larger online retailers and their delivery partners UPS, FedEx and USPS, have made a few improvements that will moderate the risk.
For the retailers with better systems and virtual inventory competency, BOPIS can be a helpful tactic. This doesn’t help much, however, for gifts sent to out-of-town recipients. And a severe winter weather event can make getting to the store just as hard as delivering packages to home.
We never know what Mother Nature has in store for us no matter what the Weather Channel and people say. If weather does not become a factor and the late buying public listens to the cutoff dates, then all could go well. But who knows. We will have the answer in a week.
In-store pickup is always less risky for retailers, assuming that their inventory management system can keep up with the pace of holiday shopping. Consumers will prefer to drive to the store for a pickup that they are sure will be there, rather than wait to see if a package makes it on time.
At the same time, like free shipping, aggressive holiday cutoff dates are becoming a price of doing business for top commerce retailers. You cannot avoid the game without paying the price.
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BOPIS is less risky only if the brick-and-mortar store has the item that the customer wants. It’s likely that online shoppers will start to see limited availability in stores as assortments start to break before Christmas. This puts the expectation back onto the e-commerce fulfillment capacity, so there is some risk involved in over-reliance on BOPIS.
Are retailers playing with fire? Of course, but it’s not a surprise that everyone wants to be the “last one standing” with the latest possible order dates and the best shot at a little more market share. Hopefully the weather over the next week will be less disruptive than in 2013—and the retailers have had a year to plan and partner more effectively with the major carriers.
There is always a risk from over promising and under delivering. However, the pure online players like Amazon have built their business on timely delivery as evidenced by Amazon Prime.
Those offering online with brick-and-mortar run the risk of missing promised deadlines for shipping to the home. However, store pickup might ameliorate some of these concerns, while driving the shopper into the store for one last rush.
Yes—but they have to.
Late shipping date guarantees have become the omni-channel equivalent of extended store hours. Because shoppers habitually procrastinate, retailers know there is a percentage of the season’s sales to be had by being the last/most convenient option available. (As a long-time Christmas Eve mall jewelry store rat—believe me, I know.)
But the new wrinkle for retailers is that they are involving a third party (or multiple third parties) in their customer experience with delivery. Store hours, employee schedules and in-store inventories all look like an operational breeze when compared to third-party logistics.
But retailers and logistics companies will work this out. They have to. They have made it the new normal of omni-shopping and there is no turning back.
The devil of retail has always been in the details. The future devil will be the supply chain and logistics beyond the retailer’s domain and control.
Today’s consumers are increasingly spoiled with consistently good delivery in non-peak traffic periods. The holidays put all systems under stress. Two-day delivery before Christmas is risky—witness last year. Guaranteed delivery on the 24th with shipping as late as the 22nd is playing with the fire gods.
Retailers in stores and online still do not control the weather. All it will take is a significant winter storm and there will be a lot of disappointed consumers.
This is a double-edged sword for retailers. Consumers want to wait until the last minute to order due to procrastination or to take advantage of deals, while retailers want to squeeze every possible transaction out of the holidays. Any disruption in service, like last winter’s storm, could bring down delivery systems, resulting in consumer frustration and anger.
Some retailers hope that buy online pick-up in store will alleviate some potential headaches. To do this retailers need to have real-time knowledge of their inventories in warehouses and stores.
It’s all a roll of the dice. Logistics, inventory management and weather will all play a role.
In-store pick-up orders are less risky, if the inventory is on hand. If the systems set up in-store are done right, I don’t see any problems with this. Specialty orders for meat and deli catering services would probably require extra time. My cut-off for deli or bakery items is this Saturday the 19th.
As far as online, if the weather cooperates, no problem. If we get bad snowy weather, then mother nature wins again, and surely some deliveries will be late for Christmas.
Certainly retalers are rolling the dice with these cut-off extensions. But there was plenty of opportunity to learn from last year’s problems and a lot of time to make the necessary changes. Those that have done so will win.
In addition to weather, the other large gamble is consumer behavior. I don’t think it’s just a wait-for-the-best-deal mentality, i.e., what retailers have been conditioning them to do. I think there has been a slow drag on personal productivity, if you will. Procrastination is rampant in business and personal communications. And isn’t online commerce another form of communication?
They did last year and I am betting a significant percentage will experience issues again this year, but with Amazon reducing its dependency on UPS and FedEx maybe the extra capacity freed up and their capacity planning based on last year’s issues will help minimize this.
Only if stores can guarantee inventory, and accurately managing in-store inventory management is still a work in progress. Think of a customer who relies on this and shows up in-store late on 12/24 only to find their order can’t be fulfilled as inventory can’t be located. Ouch. Stores need to be careful what they promise and make sure they can meet expectations.
Late cutoff times for in-store pickup is less risky for retailers, assuming their inventory systems are accurate. And even if they aren’t and retailers can’t fulfill the order in-store, they at least have the opportunity to mollify consumers by offering an alternative item from current stock (likely with a big discount to demonstrate goodwill). With home delivery, if the item doesn’t make it, it just doesn’t make it. There’s no backup, no second chance to make it right.
Late deadlines are definitely a roll of the dice, but Amazon has changed the stakes for traditional retailers. Let’s hope, though, that consumers demonstrate better judgment than they did last year. After all, Christmas is December 25th every year.
In store pick up is less risky. Hopefully the item is already in stock at the pickup location and it is a matter of setting it aside for the customers. If not, then the retailer has control through its distribution system to get the time(s) to the right location. That being said, I do believe the stores are making big bets that may not pay off.
On the other hand, for all the discussion of increased sales, I am still seeing a great deal of merchandise in the stores. Either the reports are wrong or inventory levels have been increased. Either way the after holiday sales should be huge.
Sure there’s a significant risk of disappointment to shoppers, and last year’s experience should give retailers pause. There is a cold argument, however, for just capturing those extra sales. If most of them are delivered on time, that’s great. The rest still get paid for and you can apologize later.
Shoppers have a pretty good idea that last-minute delivery orders are more subject to screw-ups and weather-related delays. I suspect the larger online retailers and their delivery partners UPS, FedEx and USPS, have made a few improvements that will moderate the risk.
For the retailers with better systems and virtual inventory competency, BOPIS can be a helpful tactic. This doesn’t help much, however, for gifts sent to out-of-town recipients. And a severe winter weather event can make getting to the store just as hard as delivering packages to home.
We never know what Mother Nature has in store for us no matter what the Weather Channel and people say. If weather does not become a factor and the late buying public listens to the cutoff dates, then all could go well. But who knows. We will have the answer in a week.
In-store pickup is always less risky for retailers, assuming that their inventory management system can keep up with the pace of holiday shopping. Consumers will prefer to drive to the store for a pickup that they are sure will be there, rather than wait to see if a package makes it on time.
At the same time, like free shipping, aggressive holiday cutoff dates are becoming a price of doing business for top commerce retailers. You cannot avoid the game without paying the price.