U.S. retailers miss fewer Christmas deadlines: early surveys

By Reuters

Dec 26, 2014 08:00 PM EST

Major U.S. retailers missed fewer Christmas deliveries this year, according to two small, early surveys released on Friday, partly reflecting a year's worth of investments made to avoid 2013's last-minute shipping debacle.

This year, 7 percent of packages ordered online did not arrive by their promised delivery date, compared with 12 percent in 2013, according to a survey of 160 orders placed by retail-intelligence firm StellaService.

Separately, management consulting firm Kurt Salmon said 13 percent of the nearly 100 e-commerce orders it surveyed did not make it in time for Christmas, down from 15 percent in 2013.

In 2013, some 2 million express packages were left stranded on Christmas Eve, according to shipment-tracking software developer ShipMatrix Inc. The reasons given were, in part, a surge in demand triggered by last-minute online promotions and bad weather.

This year, retailers pushed back the cut-off date for Christmas delivery by one day, but most were still able to hit the mark because of improvements to their logistics infrastructure, better weather and fewer last-minute deals.

"We saw a lot less of the 11th-hour promotions," said Steve Osburn, director of supply chain for Kurt Salmon. "They may have extended their deadline by about a day, but they were a little less aggressive about pushing those promotions."

Retailers set a Christmas cut-off delivery date between Dec. 19 and Dec. 20 this year, he said. The four retailers with the most aggressive cutoff date of Dec. 23 - Apple Inc, Dell Inc, Nordstrom Inc and Zappos, a unit of Amazon.com Inc - all made their deadlines, StellaService said.

The better results also stemmed from the heavy investments by United Parcel Service Inc and FedEx Corp, the world's two largest shipping companies.

UPS allocated $500 million to expand and improve its 2014 holiday operations. Both built new facilities, added more temporary workers and pushed retailers for clearer estimates and earlier deadlines to avoid last year's missteps.

The level of communication between carriers and retailers was "significantly higher" this year, Osburn said, pointing to a retail client who, in the run-up to Christmas, heard from one carrier two to three times a day.

But both surveys found that some retailers still fell short of their promises, reflecting the difficulty of accurately calculating holiday demand as e-commerce orders grow rapidly.

StellaService found nine of the top 40 retailers it tested missed delivery dates: Best Buy Co Inc, Costco Wholesale Corp, Crate & Barrel, J.C. Penney Co Inc, Kohl's Corp, Macy's Inc, Staples Inc, Toys 'R Us and Wayfair Inc.

Best Buy declined to comment. The other retailers were not immediately available for comment.

Both Staples and Toys 'R Us missed deliveries in multiple regions in the United States, and in one case, Staples canceled an order without notifying the shopper, StellaService said.

Osburn found one case where a retailer fell behind on orders and attempted to upgrade shipping on packages to make the Christmas deadline. But the volume was three to four times higher than its previous estimates, and the retailer missed the Christmas deadline, Osburn said, declining to name the company.

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