During the 2013 holiday season, shoppers across the U.S. placed online orders believing their packages would arrive before Christmas. Many of these sales depended on retailers’ guarantees.
Then, Mother Nature intervened. Huge snowstorms battered the Midwest and the South. Retailers and carriers were overwhelmed, and many customers waited until after Christmas for their last-minute orders.
You might assume this scenario forced brands to rethink their aggressive cutoff dates for online orders. But you’d be wrong. In fact, most cutoff dates have remained unchanged in the years since, or they’ve inched closer to Christmas (as late as December 23).
Every day in the leadup to Christmas, StellaService monitors these cutoff dates as advertised on retailers’ websites. We pay attention to how these dates are conveyed (explicit or implied), and how many times the dates change. Here’s where we are in 2016, and where the industry is headed.
The Name of the Game: Faster Shipping, Meaningful Guarantees
Industry wide, shipping speeds are getting faster. In 2015, pre-holiday shipping took an average of 4.1 days. This year, it’s taking 3.8 days, reflecting the fact that brands are continuing to invest in technology and infrastructure, as well as getting better at leveraging store networks when possible to speed up shipping.
Retailers are equally serious about their pre-Christmas delivery guarantees. So serious, in fact, that to remain competitive, many will cut into their own margins by expediting shipping even if customers didn’t request or pay for rush delivery.
The guaranteed-by-Christmas delivery date is now considered an important promotional tool, and retailers are getting much more competitive in its use. We don’t see this changing anytime soon.
How to Satisfy Customers Without Sacrificing Profits
There’s a fine line between trying to capture revenue leading up to the holidays and trying not to disappoint. Here’s how you can give customers what they want, minimize your losses, and come out ahead.
1. Be Clear
By now, most companies have decided on their shipping cutoff date. They’ve likely talked to UPS and FedEx to find out how much volume they can handle. Assuming you have your date locked in, make it as clear and prominent as possible on your website.
More than half of consumers (56%, according to UPS) say they’re not happy with an estimated delivery range; they prefer a precise date. During the holiday season—more than any other time of year—your customers want to know what day they’ll receive an item if they order it online today.
We’ve seen many retailers imply, rather than explicitly state, their Christmas cutoff dates. Don’t bury your cutoff date; feature it prominently, and make it a priority, so your customers can purchase with confidence.
2. Make the Most of Buy Online, Pickup In-Store
If you have brick-and-mortar stores, you have the means to make most products in your inventory available to customers within hours of their order.
If you offer buy online, pickup in-store, promote the service heavily once your Christmas cutoff date has passed. Yes, it’s more work for your customers; they’ll have to make the effort to pick up their orders. But knowing they can continue to order online after the cutoff date and still get their items before Christmas may be the biggest incentive to buy.
3. If You Can’t Overcome Delays, Notify Customers Right Away
More and more retailers have the ability to follow packages as they move through the system. If you see that a guaranteed December 24 delivery is unlikely to happen, try locating the item at a local store or shipping it locally via courier service.
If you can’t resolve the issue, let the customer know as early as possible. No one wants to wait in vain for a delivery, and most people would appreciate the opportunity to order something else.
What Might the 2017 Holiday Season Bring?
This year, Christmas falls on a Sunday. UPS and the postal service deliver on Saturdays; FedEx will likely follow suit. Next year, however, Christmas will fall on a Monday. Since UPS and FedEx don’t deliver on Sundays, what will this mean for next year’s online sales and cutoff dates?
As soon as you’ve closed the books on this year’s holiday season, start thinking about what next year might look like and what your customers will expect from you. As always, we’ll keep collecting data throughout the year—and we’ll share our thoughts about what it all means.