Will late deliveries mess up Christmas?

Discussion
Image: Fedex
Dec 13, 2017
George Anderson

Retailers know two things for certain. The first is that shoppers are going to place online orders up until the last minute for Christmas. The second is that any orders not delivered on time will be blamed on the retailer.

According to a CNBC report, retailers are setting earlier order deadlines this year for customers who want to take advantage of free standard shipping. Data from StellaService shows that Dec. 19 is the deadline being used by most retailers compared to Dec. 21 last year. Merchants are setting earlier deadlines to give themselves a hedge against a wave of late orders. Christmas falling on a Monday this year also means packages sent via standard shipping will need to be delivered by Saturday, Dec. 23.

But earlier deadlines may not be enough to guarantee that packages get to consumers in time. Carriers are expected to deliver a record number of packages and, even though UPS and others have staffed up, the sheer volume of orders has many warning of delays.

UPS recently issued a warning that deliveries were being delayed after volume exceeded expectations during Cyber Week. The carrier expects to deliver 750 million packages this holiday season, up five percent over last year. The Washington Post, citing ShipMatrix, reported that 89 percent of UPS Express packages were delivered on time between Nov. 27 and Dec. 2. UPS’s rival, FedEx, delivered 99 percent on time during the same period.

FedEx is encouraging customers to pick packages up at Walgreens and other “hold” locations as part of its delivery strategy. The service expects to make a record 317 million shipments during the holidays, a 12 percent jump from 2016.

Smaller carriers are also facing challenges. Pilots at Atlas Air Worldwide, which serves Amazon.com, claim that orders from the e-tailer are being delayed and are likely to worsen as the holiday nears. The company disputes assertions by a pilots’ union that it is flying understaffed.

Sriram Sridhar, chief executive of LateShipment.com, told The Washington Post that retailers should be up front with customers if shipments are likely to be delayed.

“The holiday rush typically translates into an automatic reduction in on-time deliveries,” he said. “If merchants aren’t proactive, it’s an almost guaranteed way of losing that customer.”

DISCUSSION QUESTIONS: Do you expect that the percentage of late deliveries will be higher this year than during past holidays? What should retailers do if they expect delays? Will carriers ultimately find a way to keep pace with the growth of online retail?

Braintrust
"Retailers should put a stake in the ground on 'last day to order' and not be afraid to shape shoppers' out-of-control expectations."
"Retailers are learning that shifting consumer expectations around reasonable delivery timetables is an uphill battle, and one they’ll likely not win."
"Unfortunately considering the increased online shopping demands, retailers are now challenged to scale, expand and evolve..."

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22 Comments on "Will late deliveries mess up Christmas?"


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Mark Ryski
BrainTrust

It’s inevitable that there will be a higher percentage of late deliveries this year. As online sales continue to grow, pressure on delivery services will also grow and it will be very difficult if not impossible to keep up. In order to relieve pressure retailers should bolster and encourage their buy online, pick up in-store programs. Ensure that the pickup counters are well-staffed, organized and processing shopper purchases efficiently. While carriers will continue to work at improving delivery, I think it’s virtually impossible to perfectly manage the holiday rush — shoppers need to keep their expectations realistic and consider ordering earlier … or shopping in store.

Min-Jee Hwang
BrainTrust

I agree with you, Mark. BOPIS needs to be encouraged heavily this year to avoid late deliveries. Many have discussed the fact that in-store shopping around Black Friday was lighter than in years past. And those consumers aren’t necessarily opting out, instead, they’re on their computers and increasingly their phones to find deals this holiday season. Online shopping will continue to grow and retailers that are able to leverage their stores (or create partnerships with stored retailers if they happen to be pure play) will be the ones to excel in customer satisfaction.

Max Goldberg
BrainTrust

The number of late deliveries will depend upon how much consumers order online and the weather. To avoid disappointed consumers retailers need to set expectations with realistic shipping deadlines and be upfront about possible delivery delays.

Art Suriano
BrainTrust

Late deliveries are a definite possibility because online sales are continuing to increase, last-minute shopping hasn’t changed and we do not have a foolproof system that can guarantee delivery on time when customers make purchases at the last minute. It is unfortunate that if the package does not arrive on time, the retailer will be blamed even when making every attempt to accommodate the customer. However last-minute shopping is an advantage for brick-and-mortar stores which can allow the customer to just go to the store. So as long as the retailer has an online presence and store locations, they should still do very well.

Brandon Rael
BrainTrust
Unfortunately considering the increased online shopping demands, retailers are now challenged to scale, expand and evolve to a more agile fulfillment strategy to avoid creating friction and not meeting consumer expectations. With that said, late deliveries are simply not acceptable in today’s Amazon Prime dominated world with a second business day shipping precedent. For some retailers and carriers, this season may end as a difficult lesson-learned situation, and the opportunity is there to streamline and optimize the fulfillment processes next year. The pressure is on both the retailers and the carriers to find innovative strategies to keep up with the demand, beyond just increasing resources, trucks, etc. This is where retailers could take full advantage of the omnichannel fulfillment capabilities that have been evolving over the past few years. Leveraging the store as a fulfillment center via the BOPIS process sounds like an ideal mitigation plan. However, there are downstream implications that need to be considered once the products hit the stores, as there will need to be dedicated resources, space and equipment to handle… Read more »
Charles Dimov
BrainTrust

Black Friday was a resounding success. The economy, jobs and stock market are all healthy. All indicators point to a continued strong retail sales holiday season. It is a GOLDEN opportunity for retailers who already have in-store pickup operating. In fact, this needs to get advertised more heavily … you can have the gift delivered, or you can pick it up directly. It seems like this could be the season for omnichannel success!

Stuart Jackson
BrainTrust

In the U.K. in 2014 and again in 2015 we saw major problems with online deliveries in the run up to Christmas. Not only were parcels late but some courier firms suspended collections — and some deliveries — altogether due to a huge backlog that built up from increased Black Friday and Cyber Monday sales.

Things didn’t improve in 2016 either. A survey done in January 2017 by YouGov found 49 percent of online Christmas shoppers polled said they’d experienced problems with timely or non-delivery of their purchases.

I do get the feeling that since then shoppers have learned the big lesson about ordering in good time. But I also think retail stores and courier firms have been determined not to repeat the mistakes of the past. Hopefully things will be improved this holiday but that’s not to say there will be no delivery problems — it wouldn’t be Christmas without them!

Neil Saunders
BrainTrust

With delivery companies already suffering from very high volumes over Black Friday and Cyber Week, it seems likely problems will spill over into Christmas.

Arguably, this will only get worse as online penetration increases. The solution lies in more flexible delivery options, further automation of certain aspects of the logistics supply chain and tiered pricing linked to tiered levels of delivery service.

Anne Howe
BrainTrust

Retailers should put a stake in the ground on “last day to order” and not be afraid to shape shoppers’ out-of-control expectations. Deliveries have been late to my house since the early fall, leading me to give myself rules that will work for my travel schedule. No fail, because planning matters. This is not rocket science, but since retailers take the blame, why not at least try to get some control?

Jasmine Glasheen
Staff

I completely agree, Anne. When retailers put a definite cut-off date in bold print on their website, shoppers have to take accountability for their own shipping demands, either by ordering early or ponying up for faster transit.

Dick Seesel
BrainTrust

It’s not as though FedEx and UPS in particular didn’t see this coming: The demand for online package delivery is surging, not only because of holiday gift-giving but also because of the orders of “everyday” commodities from Amazon and others. Stores’ move to drive “omnichannel” sales, and the shrinkage of brick-and-mortar locations in 2017, have only added to the pressure.

UPS’ decision to impose surcharges may discourage shoppers (and e-commerce retailers) from postponing, but the move seems like “too little, too late.” Once again, they seem especially unprepared for the next 10 days. It’s no wonder that Amazon in particular is moving ahead on its own vertically integrated shipping service, instead of leaving its reputation in the hands of second-party carriers.

Cathy Hotka
BrainTrust

Christmas is December 25th EVERY YEAR. It’s more than a little presumptuous of customers to order something on Christmas Eve and then be shocked — shocked! — to learn that it won’t arrive on time. We need a national discussion about this so that we can come to a consensus about what is reasonable and what isn’t, and better set customer expectations.

Joan Treistman
BrainTrust
Others on this thread have itemized the various barriers and consequences related to delayed deliveries. I agree that setting expectations is about the only way to minimize the wrath of disappointed customers. One approach is to indicate to customers as they order that whereas typically a firm date can be set, there’s been a deluge of holiday orders and now it’s more of a delivery date range. People see ranges all the time, but it can be emphasized for last-minute and close to the last minute orders. Retailers should provide a range and if possible indicate the last date for an order where a shipment can be guaranteed. If a delivery is guaranteed and doesn’t arrive on time I think customers would be pleased to hear from the retailer and receive some sort of token gift/coupon. And with that gift there should be a note that says, we’re working on this with our partners so that we can improve shipping and delivery times. It’s common knowledge among shoppers that online sales are increasing year to… Read more »
Gene Detroyer
BrainTrust

I think I am in the minority here. Other than weather, with earlier ordering deadlines and the experience and increasing sophistication of FedEx and UPS (not to mention AMAZON) I see a significant improvement.

But the challenge will be the expectation. What is an acceptable level? We can say 99.9 percent is acceptable, except for the 0.1 percent don’t get the package. And that 0.1 percent could be a huge number.

While I expect significant improvement, the issue won’t go away for those caught on the wrong end.

Ed Dunn
Guest
1 month 4 days ago

The picture of delivery seem to be a free-standing home with a front porch but in urban environments, we are experiencing issues in the last mile of delivery. In our multi-unit complex, we are experiencing an issue with the Luxor package lockers filling up fast and the delivery guy just leaving our boxes around the lockers for anyone to pick up. One time, the Luxor system went down and no one could retrieve their package over the weekend and had to wait until Monday for someone to come out and fix it.

Shep Hyken
BrainTrust

NOT AGAIN! We have gone through this before. The carriers miss delivering packages for reasons such as not anticipating volume or not expecting bad weather. To that I say … “Bah Humbug!” Come on! UPS is already alerting customers that their shipments could be delayed. It’s still almost two weeks out from the big day (Christmas). So here are a couple of thoughts. First, all carriers must let retailers and customers know what they can count on. Retailers can’t take a chance that their carrier or choice will fail, as it reflects poorly on them if it happens. So let customers know what to expect. Suggest alternatives rather than home delivery; such as delivering to the drop locations, like Walmart.

There is tons of data and companies like IBM (using Watson) can predict with great accuracy what can be expected. So look at the data. Ramp up for it. Plan ahead! Noah didn’t build the Ark after it started raining!

Jeff Hall
BrainTrust

It is almost certain that a higher percentage of deliveries will arrive late this year, given that online sales have increased exponentially and, more importantly, consumers have grown accustomed to same-day/next-day/two-day delivery and simply expect the carriers to keep pace regardless of it being the holiday season.

Retailers are learning that shifting consumer expectations around reasonable delivery timetables is an uphill battle, and one they’ll likely not win. Shipping status transparency and setting earlier deadlines are all good and well, however customer expectations are likely to remain fully entrenched around quick, reliable delivery. Anything less and it is the retailer who suffers.

Ralph Jacobson
BrainTrust

This is really an incredible consumer situation we’re in. Shipping companies have more business than they can handle, not just during the Holidays, but all through the year, these days. I’m thinking about buying a truck and just taking some of the overflow!

Will blame be placed by consumers on everyone (shippers, retailers, etc.), except the consumer themselves (for ordering too close to the holidays)? Yep! Each year, more innovative ideas come to market to deal with the shipping challenges. I suspect each year, performance will be better and better, so the best thing to do is budget staff for last-minute deliveries and do your level best to make the window!

Chuck Palmer
BrainTrust

Retailers need to be thoughtful of their customers’ concerns. There are ways to automate notifications of package tracking. They should think about sending notifications even if there is a remote possibility of a delay. Given unforeseen events, consumers will understand, but being upfront and honest goes a long way for long-term brand loyalty.

In retail, a problem is always an opportunity to make a better customer.

Karen S. Herman
BrainTrust

The Amazon Effect has created a ripple this holiday season that may find some shoppers very sad on Christmas Day and I’m concerned about Free Shipping Day coming up this Friday, December 15th. The online retailers offering free shipping and delivery by Christmas should revise their message as needed. Better to be proactive and on top of the logistics here than leave a customer empty handed on Christmas Day.

Byron Kerr
Guest

Statistically, as more sales come online, I would expect a slight correlation with higher missed deliveries. However, retailers preparing for this growth would have developed safeguards to ensure a positive customer experience.

Amazon made a bold statement today announcing the launch of same-day delivery in over 8,000 cities, with same day delivery available on 12.24 if ordered by 9:30 local time. The key to keeping a positive customer experience is around setting the appropriate expectations, with corresponding buffer times.

Amazon is very transparent on when there may be delays right on the product page. Are other retailers willing to be transparent to let customers know they can’t fulfill something another retailer can? Survey says: not yet.

Sriram Sridhar
Guest
I am glad to have contributed to the articles mentioned in this post, on behalf of LateShipment.com Interestingly, shipping is an industry in which carriers like FedEx and UPS command so much market dominance that they can get away with worse performance, removing many money-back delivery guarantees they have in place during other parts of the year and increase prices for their services during this time of the year. Unfortunately, as things stand, merchants and customers alike are relegated to blaming each other for late deliveries and ordering too late, as it is almost impossible to hold shipping carriers accountable for the error, even though delays and bad deliveries often start and end with the shipping carrier not doing what they promised with regards to the shipment. We hope things change and shipping carriers like UPS and FedEx are forced to offer more transparency and accountability but until then, even though it is unfair to a business, customers will still continue to hold you responsible for any delivery errors or delays. We notice the best… Read more »
wpDiscuz
Braintrust
"Retailers should put a stake in the ground on 'last day to order' and not be afraid to shape shoppers' out-of-control expectations."
"Retailers are learning that shifting consumer expectations around reasonable delivery timetables is an uphill battle, and one they’ll likely not win."
"Unfortunately considering the increased online shopping demands, retailers are now challenged to scale, expand and evolve..."

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