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Kurt Salmon: These Retailers Topped ‘Santa’s Nice List’ for Holiday Shipping

With online buys ramping up in retail, companies are having to do more to get goods to customers fast, right on time and typically for free. But many of them aren’t getting it right—shipping speeds this holiday season were more disappointing than last.

In its study of online Cyber Monday orders from 62 retailers across multiple categories, global management consulting firm Kurt Salmon found that the season’s speediest shippers got product to their consumers in an average of 2.8 days, a touch longer than last year’s 2.7 days.

“As we place the order we then track the level of communication from the retailer, how long it sits in the warehouse versus how long it sits in transit, what percent had problems ordering, did we get the merchandise,” Kurt Salmon retail strategist Steve Osburn explained.

This year, Zappos topped the winners list delivering goods in one day, followed by Barney’s and Burberry with two days for delivery, and Amazon, Under Armour, Saks and REI getting purchases to shoppers in three days. Shoppers buying at Bloomingdale’s got their orders in an average of four days.

Last year, Google came in first with deliveries made in one day, followed by Net-A-Porter and Walgreens who delivered orders in two days, and Amazon, Barneys New York, Cabela’s, Nike, Staples, TOMS and Under Armour with three day deliveries.

“This year, we really saw the top retailers separate themselves from the rest of the pack,” Osburn said. “And, like Rudolph, we expect many retailers will try to follow these top performers’ lead next year, leading to even happier holidays for consumers if retailers can execute against their wish lists.”

What made this year’s results more lackluster than last, however, was that beyond the top performers, more retailers were on the ‘naughty list.’ The average order-to-delivery time across all retailers analyzed was 6.9 days, 20 percent slower than the 2014 average.

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Though they haven’t yet aced the speedy shipping, more retailers are at least offering the service for free.

According to the study, 90 percent of retailers offered some way for a shopper to get free shipping, a 15 percent jump over last year. Sixty-four percent of those retailers offered free shipping on everything, nearly double that of 2014.

Buy online, pick up in store (BOPUS) also saw an uptick, but more brands made the naughty list than the nice one in this department, too.

Target, Macy’s and Lowe’s all offered good post-purchase communication, had orders ready in less than two hours and made the pickup experience quick and simple, according to analysts.

Overall however, Osburn said, “Retailers did pretty poor when it comes to buy online pick up in store. If we order four units and the retailer says it will be ready in four hours, the success rate was less than 50 percent.”

To be exact, the success rate was only 40 percent for BOPUS transactions without error, compared to 91 percent of delivered orders in the study.

“This huge service gap—especially in such a customer-facing area—exposes retailers and can leave customers out in the cold,” the report noted.

When it comes to shipping costs for retailers, they’re on the rise.

“With more distribution points, the number of packages per order is increasing. Paired with less revenue from shipping, with only 10 percent charging a fee, retailers are facing higher-than-ever fulfillment costs,” according to the study.

Carriers are also having a hard time keeping up with the influx of online orders. As Kurt Salmon strategists noted, 9 percent of packages sent UPS ground faced an unexpected shipping delay.

“While these are typically small delays and pale in comparison to some retailer-caused delays, they point to a larger problem—a carrier network at capacity,” the report noted. “You only have to look back to 2013 to find out what could happen if the order volumes exceed retailer and carrier capacity. That was the year that 15 percent of the packages Kurt Salmon ordered at the last minute did not make it under the tree in time.”