Online retailers, shippers gear up for final holiday push
With a week left before Christmas, major retailers and shipping companies are gearing up for the holiday rush and cautioning customers about their cutoff dates for guaranteed package delivery by Christmas Day in an effort to avoid last year's delivery debacle.
Last year, a larger-than-expected surge in last-minute online holiday shopping and bad weather left an estimated 2 million express packages undelivered, according to shipment-tracking software developer ShipMatrix Inc. Most prominently, Amazon.com and United Parcel Service were unable to fulfill a number of orders by Christmas.
"What happened last year was around competition and retailers over-promising deliveries," said Trae Bodge, senior lifestyle editor for online coupon provider RetailMeNot. "Thankfully, we are seeing that the shipping companies are getting ready in anticipation of the last push for shipping."
Hundreds of online retailers are offering free shipping with guaranteed delivery by Christmas Eve for orders placed by Thursday. FedEx has said the last day to ship with FedEx Ground for pre-Christmas delivery is Wednesday, while UPS said its ground shipping deadline is Thursday, and the U.S. Postal Service's priority mail deadline is Saturday.
This time around, with online sales projected to grow to more than $100 billion and more than 1 billion packages expected to be delivered between Thanksgiving and Christmas, major retailers are working more closely with shipping companies to manage package volume forecasts. Both shippers and retailers have hired additional seasonal staff, and retailers are making shipping deadlines clearer to customers.
"All of the shipping companies really have done a lot to correct the issue," said Danielle Conte, a Centerport-based retail consultant and founder of customer shopping experience blog YoutailRetail.com. "But we're not there yet. We still have a lot of shopping days ahead of us and a lot of delivering days ahead of us."
SPEEDING UP DELIVERY
Despite the delivery and service challenges, retailers are investing in free and faster shipping in order to capture more e-commerce sales this season. Nearly 50 percent of retailers will guarantee delivery by Christmas for orders placed by Dec. 20, compared with 37 percent last year, according to a survey of more than 100 retailers by global management consulting firm Kurt Salmon.
"Consumers are pushing the shopping later each year, and retailers worry that 'If I don't offer it, my competitor will,' " said Steve Osburn, retail strategist for the Manhattan-based firm.
Deer Park-based beauty e-retailer FragranceNet.com offered standard delivery until Monday this week and will express-ship for Christmas delivery until 6 a.m. next Monday.
Other retailers, including Walmart and 1-800-Flowers .com, offer shipping options until Dec. 23 for delivery by Dec. 24. Walmart's standard shipping deadline is Friday, while the standard shipping cutoff For 1-800-Flowers' gift basket retailer Harry & David is Saturday.
"We can take orders later in the game because we are close to our customers," said spokesman Joseph D. Pititto of Carle Place-based 1-800-Flowers, whose brands such as Cheryl's cookies, Fannie May chocolates and The Popcorn Factory ship from multiple warehouses across the country.
UPS expects to deliver 585 million packages this month, an 11 percent increase compared to last year. FedEx expects to ship more than 290 million packages from the day after Thanksgiving through Christmas Eve. USPS projects it will deliver 470 million packages between Thanksgiving and Christmas, a 12 percent increase over last year.
To prepare for the rush, UPS hired 95,000 seasonal workers nationally, FedEx hired more than 50,000 seasonal workers, and USPS hired 30,000 for the holidays. And retailers have offered alternatives to customers, including buying online and picking up in store, as well as same day or next day delivery through Google, eBay and Deliv, Osburn said.
EARLY SHOPPING ENCOURAGED
To avoid last-minute delivery and service hiccups, some retailers offered promotions encouraging early online shopping, said Maria Haggerty, founder and CEO of Dotcom Distribution, a logistics and fulfillment firm based in Edison, New Jersey.
"Retailers understood the limitations of the carriers at this time of the year," said Haggerty, who lives in Oyster Bay and whose firm works with retailers such as Bliss, Ashley Stewart and Carol's Daughter. "They drove the sales earlier this season, which clearly has helped the shipping companies."