Study: Retailers deliver on holiday shipping expectations
Retailers followed through on their shipping promise this holiday season — with Amazon Prime delivering all the way to midnight on Christmas Eve.
Ninety-three percent of retailers successfully processed and accurately delivered orders to customers on their last guaranteed shipping date before Christmas, according to the 2018 Holiday Shipping study from Kurt Salmon, part of Accenture Strategy. (Orders were placed with 52 U.S. retailers across a broad range of categories, including traditional big boxes, specialty retailers and online-only etailers, to measure their ability to fulfil customer orders on their last guaranteed shipping date before Christmas.)
The following retailers came out on top in the Kurt Salmon study for delivering standard shipping orders (placed on or after 12/20) to their customers before Christmas:
• Amazon Prime – Ordered on 12/22
• Under Armour, Lululemon, MM.LaFleur, Coach, L.L.Bean, Nordstrom and Zappos – Ordered on 12/21
• Dillard’s, Macy’s, Timberland, Sephora, Saks Fifth Avenue and Best Buy – Ordered on 12/20
The study found that non-traditional retail channels were the real winner this year. Amazon Prime Now (which promises 2-hour delivery) was delivering up until midnight on Christmas Eve. Also, ‘buy online pick-up in-store’ options were available late on Christmas Eve from many retailers, including Kohl’s, Best Buy, Home Depot and Lowe’s.
In other findings:
• One third (33%) of retailers opted out of having a ‘last order promise date’ as Christmas approached to avoid disappointing customers.
“This was the highest percentage we’ve seen compared to previous years. Instead, many retailers decided to push their BOPUS capabilities and in-store specials to drive last-minute sales and reduce risk,” the study reported.
• Retailers that pushed the limit with delivery dates were the ones that disappointed customers. Although the average cutoff date was 12/17, all of the retailers that failed to deliver had a cutoff date of 12/19 or later.
“Those [retailers] that came out on top ensured they built out the appropriate capacity in their network, successfully implemented alternative fulfillment methods – such as ship from store and BOPUS – and had the right order routing capabilities,” said Steve Osburn, managing director at Kurt Salmon. “Delivering on shipping promises before Christmas is extremely challenging and has huge consequences for those that get it wrong. With online sales continuing to rise, retailers have to ensure they are operationally robust to deliver on time, able to change direction at a moment’s notice, and offer flexible delivery alternatives to avoid letting customers down.”
“As retailer networks become even more complex – with multiple distribution centers and ship from store options driving more and more of the fulfillment – retailers need to have systems in place to ensure that the right shipping method gets used regardless of where the items get picked and shipped,” Osburn added.
Accenture Strategy research found that 54% of U.S. consumers now expect holiday orders, with free shipping, to arrive in just three days.
“With the majority taking much longer to deliver – around six days – retailers have got a long way to go to meet this expectation,” Osburn said.
Target to expand Shipt’s assortment, operating markets
Target has some big plans for its Shipt business next year.
Starting in 2019, the discounter will expand the assortment and operating markets that are supported by its same-day grocery delivery service Shipt. Currently, the service, which is available in more than 200 markets across 46 states, enables Target to deliver groceries and essentials, home, electronics, gifts, and decorations, among other categories, within an hour.
Target acquired Shipt for $550 million in December 2017 — one of the largest acquisitions in the company’s history. The partnership has enabled the discounter to achieve its goal of bringing same-day delivery services to shoppers at approximately half of Target’s stores by early 2018, and in most stores in all major markets before the 2018 holiday season. (Shipt only serviced 70 markets when it teamed up with Target.)
“We’re always looking for ways to make shopping Target’s selection even easier,” John Mulligan, Target’s chief operating officer, said in Target’s blog, “A Bullseye View.” “With Shipt, same-day delivery became a reality for our guests across the country, making Target the first retailer to offer the service coast to coast.”
While the service offers same-day delivery on items across the store, Shipt’s most popular category is grocery. The top 25 most frequently purchased grocery items included eggs, milk, bananas, strawberries, avocados, shredded cheese, butter, and limes, among other products, according to Target.
Shipt’s tie-up with Target has also help the company hit its own milestones. Shipt memberships tripled year-over-year, and the company has hired more than 375 new employees across its Birmingham, Alabama and San Francisco offices. Additionally, Shipt plans to expand their headquarters in Birmingham, a plan that will add “hundreds” of new jobs to the area, according to Target’s blog.
BJ’s Wholesale Club adds member to its board of directors
BJ’s Wholesale Club’s board of directors has a new member.
The Westborough, Mass.-based company announced that Christopher H. Peterson, the executive vice president and chief financial officer of Newell, would be joining the retailer’s board and serving as the chair of the Audit Committee.
Peterson previously served as the chief operating officer, operations at Revlon, where he helped lead the brand’s global supply chain, finance and IT divisions. He also has held the president, global brands at Ralph Lauren and spent 20 years at Procter & Gamble.
In addition, the retailer announced that Tommy Yin, an associate at Leonard Green who joined the board in 2017, would be departing.
“We’re pleased to add Chris to our board and look forward to working with him moving forward,” Christopher J. Baldwin, chairman and chief executive officer of BJ’s Wholesale Club, said. “His extensive experience in the consumer goods industry and leading transformation programs will be extremely valuable as we continue to transform BJ’s Wholesale Club. I also want to thank Tommy for his contributions to our company.”