OPERATIONS

Study: Retailers delivered on their holiday shipping promises

BY Marianne Wilson

Retailers followed through on their shipping promise this holiday season — with Amazon Prime delivering all the way to midnight on Christmas Eve.

Ninety-three percent of retailers successfully processed and accurately delivered orders to customers on their last guaranteed shipping date before Christmas, according to the 2018 Holiday Shipping study from Kurt Salmon, part of Accenture Strategy. (Orders were placed with 52 U.S. retailers across a broad range of categories, including traditional big boxes, specialty retailers and online-only etailers, to measure their ability to fulfil customer orders on their last guaranteed shipping date before Christmas.)

The following retailers came out on top in the Kurt Salmon study for delivering standard shipping orders (placed on or after 12/20) to their customers before Christmas:

• Amazon Prime – Ordered on 12/22
• Under Armour, Lululemon, MM.LaFleur, Coach, L.L.Bean, Nordstrom and Zappos – Ordered on 12/21
• Dillard’s, Macy’s, Timberland, Sephora, Saks Fifth Avenue and Best Buy – Ordered on 12/20

The study found that non-traditional retail channels were the real winner this year. Amazon Prime Now (which promises 2-hour delivery) was delivering up until midnight on Christmas Eve. Also, ‘buy online pick-up in-store’ options were available late on Christmas Eve from many retailers, including Kohl’s, Best Buy, Home Depot and Lowe’s.

In other findings:

• One third (33%) of retailers opted out of having a ‘last order promise date’ as Christmas approached to avoid disappointing customers.

“This was the highest percentage we’ve seen compared to previous years. Instead, many retailers decided to push their BOPUS capabilities and in-store specials to drive last-minute sales and reduce risk,” the study reported.

• Retailers that pushed the limit with delivery dates were the ones that disappointed customers. Although the average cutoff date was 12/17, all of the retailers that failed to deliver had a cutoff date of 12/19 or later.

“Those [retailers] that came out on top ensured they built out the appropriate capacity in their network, successfully implemented alternative fulfillment methods – such as ship from store and BOPUS – and had the right order routing capabilities,” said Steve Osburn, managing director at Kurt Salmon. “Delivering on shipping promises before Christmas is extremely challenging and has huge consequences for those that get it wrong. With online sales continuing to rise, retailers have to ensure they are operationally robust to deliver on time, able to change direction at a moment’s notice, and offer flexible delivery alternatives to avoid letting customers down.”

“As retailer networks become even more complex – with multiple distribution centers and ship from store options driving more and more of the fulfillment – retailers need to have systems in place to ensure that the right shipping method gets used regardless of where the items get picked and shipped,” Osburn added.

Accenture Strategy research found that 54% of U.S. consumers now expect holiday orders, with free shipping, to arrive in just three days.

“With the majority taking much longer to deliver – around six days – retailers have got a long way to go to meet this expectation,” Osburn said.

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