To avoid uncertainty and lessen the risk of disappointing customers, 30% of retailers opted not to provide a guaranteed holiday shipping date in order to have orders arrive before Christmas 2017, according to a study conducted by Kurt Salmon, a unit of Accenture.
This was the highest figure since Kurt Salmon began measuring holiday shipping performance five years ago. Of those that did provide a shipping guarantee, the average cutoff date was Dec. 17, the earliest it has been since 2014.
Steve Osburn, Managing Director at Kurt Salmon, said with strong sales this past holiday season, many retailers were met with operational challenges from increased customer demand, leading them to err on the side of caution. This led them to move the average cutoff date back by a day.
“Delivering on holiday shipping promises before Christmas is a huge challenge with enormous consequences for those that get it wrong,” Osburn said. “With online sales continuing to rise, retailers have to ensure they are operationally competent to deliver on time, have the ability to change direction at a moment’s notice and can offer flexible delivery alternatives such as buy online, pickup in store or risk letting down customers.”
Kurt Salmon conducted the holiday shipping study by researching retailers’ posted cutoff dates and ordering items on the last day for guaranteed delivery, then noting how they performed. For the fulfillment portion of the study, orders were placed with 49 retailers, from locations around the country to account for both time taken in DC order processing and shipping. The companies included a cross-section of big-box retailers, ecommerce pure plays and specialty sellers.
Osburn said the fact that many store-based retailers offer store pickup may have contributed to the increase in those without published cutoffs.
“BOPIS really is a win-win,” he said. “Customers get their product sooner, and the retailer doesn’t have to pay shipping charges. They just need to make sure the item is in stock and can be picked. And while in the store they can be upsold on additional related items and offered a discount.”
Kurt Salmon recognized five retailers that offered guaranteed standard delivery by Christmas on orders made up to Dec. 21, and made good on the promise: Coach, Dillard’s, Home Shopping Network, Nordstrom and Abercrombie & Fitch.
“In order to make our top five, these companies had to take an additional risk (with later cutoffs), and this year that risk paid off,” Osburn said. “There weren’t carrier delays or weather delays, so they were able to deliver successfully against that.”
Kurt Salmon started conducting the study in 2013, the year that more than a million packages didn’t arrive by Christmas due to a variety of factors, including networks that were overwhelmed by greater-than-expected ecommerce order volumes.
“The on-time delivery performance overall this year shows that retailers have been working hard to make sure they have all the systems in place so they can respond properly to customer demand,” Osburn said. “This year, we also saw examples of how they’re changing their messaging to make sure they don’t end up not delivering on their promises. There’s been a lot of work done on both sides of the supply chain, retailers and carriers, in order to get to this point.”