Peak-Season Recap: Lessons from the 2018 Holiday Rush

by LJM Group

2017 was our first taste of what’s sure to become a new annual tradition for the Carriers: ever-increasing holiday peak-season surcharges. For businesses shipping serious volume during the holiday season, it’s truly a brave new world.

2018 was no different, and we saw a slew of holiday fees imposed by both UPS and FedEx.

What 2018 taught us about customer demand

We’ve discussed at length how the days of “reasonable expectations” for holiday shipping are long over. Customer expectations are at an all-time high, and that’s especially true during the holidays. Quick or overnight delivery has become the default expectation. People tend to delay orders, even during the holiday rush. In 2017, over 70% of shoppers anticipated they would be doing last-minute shopping. Why? Because they can.

Regardless of the supply chain involved, retailers get the blame for a bad experience with a delivery. Let’s revisit a few stats from our cautionary look at Dropoff’s 2018 survey about holiday shipping demands:

  • 80% of shoppers wouldn’t go back to a retailer that gave them a negative delivery experience
  • 67% have abandoned their gift purchase because the offered delivery times were slow
  • 75% said they would be likely to shop with a retailer again in the future who successfully offered same-day delivery to them in the past

So when it comes to customer retention, it better be fast, and it better be on time. Peak-season shipping has gone from an end-of-year stress to a serious distribution strain.

Peak-season 2018: how’d we do?

So how did retailers do during peak-season 2018? According to a new study by Accenture Strategy, 93% of the surveyed retailers kept their shipping promises. A broad-based group of 52 retailers were measured on their ability to fulfill customer orders on Dec. 21, the last guaranteed-shipping date before Christmas.

Most companies came out ahead by avoiding risk, showing that retailers are attuned to the value of managing shopper expectations. The average cut-off date for the companies surveyed was December 17 — the earliest it’s been since 2014, indicating a cautionary mood. What about the unsuccessful 7% — what went wrong? All the companies who failed to deliver packages on time had riskier cut-off dates of December 19 or later.

A few select retailers put themselves ahead of the curve by making bolder promises, moving forward their cautious cut-off dates for by-Christmas delivery and offering tantalizing perks such as free shipping, overnight or, in some cases, same-day delivery. Amazon Prime Now promised two-hour delivery and was delivering packages as late as midnight on Christmas Eve.

But for the first time since Accenture began measuring holiday shipping in 2012, a large number of retailers — one third — dispensed with such risky promises, opting not to provide a guaranteed shipping date at all. These retailers de-emphasized by-Christmas delivery in favor of focusing on in-store fulfillment and last-minute sales.

Prepping for 2019

Customers remember if, and how well, their holiday shopping expectations were met. They use that impression to decide whether to give you repeat business. So the impact you make on your customers during the holidays can pay dividends — or cost you big. If you make the effort to develop fast, convenient delivery options during the holiday rush, you’re likely to benefit from customer loyalty all year long. By the same token, avoiding customer disappointment pays off more than enticing customers with promises you may be unable to keep. Get it wrong, and you’re endangering your customer loyalty as well as your brand equity.

As shopper demands spike, we can expect this year’s holiday season to be even more of a strain. Does your shipping program offer the kind of flexibility to make customers happy while still showing profits?

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