Amazon.com Inc. packages stand in front of a FedEx Corp. delivery truck. in New York.
Christopher Lee | Bloomberg | Getty Images
You haven’t ordered all of your Christmas gifts yet and want to buy online?
You might want to think about it again.
If it was another year, shoppers usually have more time to complete their vacation shopping online without running the risk of these packages not arriving on their doorstep by Christmas Eve.
But this year it looks very different. Retailers’ supply chains have been strained for weeks and backlogs in warehouses have increased as e-commerce sales increase year on year and companies need to quickly adjust their workforce to meet the unprecedented demand. Freight forwarders like UPS and FedEx have worked 24/7 to deliver packages on time. But now it’s also their job to prioritize and track deliveries of the coronavirus vaccine.
With a record number of people shopping online, Adobe Analytics expects Christmas sales this year to increase more than 30% from 2019. According to Jason Goldberg, chief commerce strategy officer at Publicis Communications, part of Publicis Groupe, the majority of retailers have extended shipping deadlines by at least one to two days and about 25% by at least a week.
Christmas Eve delivery deadline
Tuesday marks the official closing date for UPS, FedEx and the US Postal Service in the US through December 24th.
“The carriers are well equipped to handle both vaccine distribution and e-commerce shipping needs – not to mention the fact that they both rely on very different pieces of UPS and FedEx infrastructure,” said Laura Behrens Wu, CEO and co-founder of Shippo, a provider of shipping software for e-commerce companies.
“But if 2020 has taught us anything, retailers and consumers should prepare for the unexpected,” she said. “While service disruption is unlikely, it is still a smart idea for retailers to keep track of delivery trends in real time and communicate shipping status with customers.”
Clothing retailer H&M is currently telling buyers on its website: “Attn: Orders placed today won’t be placed until Christmas.”
For others, like Bath & Body Works and Abercrombie & Fitch, the Christmas delivery deadline has also passed.
Deal experts warn popular brands like Nike and Puma of delays and encourage people to buy as early as possible.
In total, up to 7 million packages a day could be delayed from Thanksgiving to Christmas, according to Satish Jindel, president of ShipMatrix, a company that analyzes shipping package data.
Keep under pressure
Still, he said, national airlines have done quite well so far under pressure to deliver items on time. Jindel attributed the trend in part to strong preparation in summer and fall and to the warmer, drier weather that has covered much of the country in recent weeks.
From November 22 to December 5, on-time delivery rates for FedEx, UPS, and USPS were 94.9%, 96.3%, and 92.8%, respectively, according to ShipMatrix. However, these percentages all declined in the first three weeks of November and the volume increased.
“You have to ask yourself how some of these Christmas sales will go this year,” said David Berliner, head of BDO’s business restructuring and turnaround services practice.
“There are probably some procrastinators who will freak out that they waited, with all the shipping problems that are likely to arise in the past few weeks.”
When shipping is no longer possible, procrastinators have to visit stores on vacation to complete their purchases.
However, a quick trip to the mall becomes especially troublesome during a global health crisis when most retailers still have store capacity restrictions, operating hours are reduced, and protocols like wearing masks must be followed. The US Centers for Disease Control and Prevention has classified vacation shopping in crowded stores as a “riskier” activity and encouraged Americans to shop online using options like roadside pickup.
Companies like Kohl’s and JC Penney have chosen to promote safe shopping in their vacation marketing this year by using roadside pickup. Penney is offering a 10% discount on select items when shoppers use roadside or in-store pickup. Banes & Noble also offers a 15% discount on purchases when shoppers use their online purchase and pickup option.
From November 1 to December 9, the number of online curb pickup orders increased 88% year over year, according to Adobe. From December 1-9, when shipping deadlines were fast approaching and Covid cases were still on the rise across the country, the curb grew 94% and the companies that offered it had 33% higher conversion rates than those who didn’t.
Despite the pandemic and the financial strain on some families, consumers are still opening their wallets to spend on themselves and their loved ones and round off the year. Retail sales this holiday season are projected to grow up to 5.2% to $ 766.7 billion this holiday season, according to a forecast by the National Retail Federation.
Much of that spending is, of course, made online and likely focused on those retailers ready to meet shoppers with the right merchandise and deliver on their delivery window promises.
As in every Christmas season, there will be winners and losers in retail this year too. The losers could see more bankruptcies and store closings in early 2021.
“Retail has to do the math,” said Mike Cassidy of Signifyd, a platform that helps e-commerce companies prevent fraud.
“You can add Shipageddon and the weakness of the retail fulfillment system to the list of trends that accelerated the coronavirus pandemic,” he said. “The extent of the challenge becomes crystal clear … as the shipping deadlines for Christmas Eve delivery come and go. It’s a harrowing time of any holiday season, but this year it’s particularly stressful.”
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