Online retailers are under a special type of stress this holiday season that accompanies their ambitious promises of one-day package delivery.
Amazon and Walmart are among the retailers that are committed to delivering consumer orders within a 24-hour delivery period. The coming weeks will be the first test of whether they can keep their promise during the holiday shopping season, when order attacks and bad weather can derail even the best delivery systems.
It is an expensive feat that requires not only additional aircraft and vehicles, but more workers and lots of data to help retailers prepare and predict what buyers may buy.
And the interest on delivery on time is high. A late package can damage a retailer’s reputation, as buyers often blame them, even if the late arrival is the fault of the delivery company.
“The store made the promise,” said Suketu Gandhi, a partner in the digital transformation practice at consulting firm AT Kearney.
- CNET Holiday Gift Guide for 2019
- Black Friday 2019 offers
Amazon found out six years ago, when UPS and FedEx were paralyzed by bad weather and last-minute online shopping, which caused millions of packages to arrive late for Christmas.
Since then, the online shopping giant has been building its own delivery network to give you more control over when and how your packages are delivered. It has leased aircraft, built package sorting centers at airports, and launched a program that allows contractors to start businesses delivering packages in vans.
Amazon has raised the bar for competitors
Amazon’s competitors are under pressure to keep pace with the online retail giant, which has raised consumer expectations. When the company introduced two-day shipping about 14 years ago, shoppers expected the same from other stores. This seems to be happening again.
“Customers love two-day delivery,” said Mark Cohen, a professor of retail studies at Columbia Business School in New York City. “But they like it more one day.”
Offers and thefts before the holidays
05:17
However, smaller retailers will be harmed by trying to pay for a faster shipment, said Cohen, who used to be a Sears Canada executive.
The push for even faster delivery comes after Amazon announced in April that it would reduce delivery for Prime members to day two. Walmart and Best Buy continued with their own ads. Many smaller retailers are also trying to deliver faster, according to UPS, which said it will fly 11 more planes this year to keep up.
But many eyes will be on Amazon this holiday season and whether it will deliver on its promises of even faster delivery. Amazon orders are expected to account for 42% of all online sales this holiday season, according to management consultancy Bain & Co.
The Seattle-based company says it is up to the challenge: “We deliver to our customers every day and are confident in our ability to serve customers this holiday season,” Amazon said in a statement.
Faster and more expensive delivery for companies
Amazon has another advantage over its competitors: a lot of cash. It is expected to spend about $ 1.5 billion during the holiday season, in part to bring items closer to customers and pay more shifts. He says the cost is worth it and that one-day delivery is already bearing fruit in the form of more consumers pending orders.
Amazon has more than 100 stores nationwide for storing, packing, and shipping goods. Walmart is using stores and stores close to customers to pack orders the next day. Best Buy has opened stores near the heavily populated cities of Chicago, Los Angeles and New York. Target says more than 90% of online orders are packaged in stores.
While Target doesn’t promise next-day delivery, it says half of its two-day deliveries show up at customers ’doors the next day. It also offers same-day delivery from stores for an additional fee and, like other retailers, offers an option for customers to shop online and receive in-store.
Carriers say they are ready for the influx of packages. UPS, which says next-day air shipments rose 24 percent in the most recent quarter, has built more package sorting centers that will help it process an additional 400,000 pieces per hour. FedEx will once again offer online retailers a way to ship the next day or two days when orders arrive in the afternoon or evening. And the U.S. Postal Service says it will deliver packages to more cities on Sunday, a change it usually makes during the holidays.
- In:
- best buy
- Amazon
- Walmart
- Amazon Prime
Add Comment