You will be redirected back to your article in seconds
Skip to main content

Survey: Retailers Speed Peak-Season Shipping to Secure Sales

In an already promotional retail environment, where free shipping for e-commerce orders is an expected offering, brands are battling to speed up delivery times to accommodate conditioned consumers and a competitive market.

According to a new survey of 100 brands by global management consulting firm Kurt Salmon, retailers will be shortening shipping windows by almost two days this holiday season.

Last year, it took retailers eight days on average to get orders to consumers, with 3.4 days for processing and 4.6 days to ship. This year, retailers are working to cut that window down to 6.1 days for both processing and shipping.

And competition is driving the sought shorter deliveries. Free and faster shipping were among the top concerns retailers revealed in the survey when asked how competitive shipping and fulfillment could harm holiday sales. Thirty-six percent of retailers expressed worry over competitors offering free shipping and 18 percent said they are concerned about losing sales to those companies offering next and same-day delivery.

Target has already announced free shipping for the holiday, as part of its own effort to bounce back after its system hack, and the survey revealed that the “shipping war is on” as 76 percent of retailers were already offering some form of free shipping during the off-peak season, compared to just 35 percent last year.

Kurt Salmon retail strategist Steve Osburn said, “It’s high stakes during the holidays, and retailers are playing a game of ‘anything you can do, I can do better’ when it comes to fulfillment.” He added, “While it’s great for consumers looking for deals and convenience, it’s proving challenging for retailers who are already contending with constrained margins from a heavy promotional environment. We’ve seen retailers making progress to improve and enhance fulfillment practices to avoid the issues we saw in 2013, but every retailer can’t be Amazon.”

Related Stories

Forrester Research predicts that holiday e-commerce sales will be up 13 percent to $89 billion this year, and retailers are investing in response. Twenty-five percent of retailers surveyed said their top focus for fulfillment improvement was on shipping, and 24 percent said they would spend money to improve technology/information, like shipping management systems and distribution software.

Last year, last-minute orders proved a pain for retailers as those surveyed said roughly 15 percent of orders arrived late. Twenty-six percent cited failing to upgrade shipping when items left distribution centers late, 25 percent simply didn’t have the available inventory, 45 percent blamed the shippers, and 24 percent said the carriers were at fault.

But despite the slightly flubbed fulfillment, retailers said they will be even more aggressive in trying to capture e-commerce sales this season. A total of 26 percent of the retailers, up from 17 percent last year, said their cut-off for guaranteed by Christmas delivery will be one to three days before Christmas. Nearly 50 percent of retailers will promise Christmas delivery for orders placed by Dec. 20, compared to just 37 percent in 2013, and the last order date will be between Dec. 19 and 20 on average, when more retailers cut the Christmas orders off around Dec. 18 last year.

“After a few years of spending spikes early and late in the season, retailers are making ambitious promises in order to capture last-minute online sales,” Osburn said. “But if you compare average delivery times with last-minute promises, there is a gap that retailers will need to account for.”