As Christmas looms, the shipping wars accelerate
As Christmas looms, the shipping wars accelerate
Time is running out for procrastinating shoppers if they want their online orders to make it by December 25th. With Christmas Eve falling on a Sunday, customers may be paying a premium for last-minute shipping this year.
UPS and FedEx have set Friday as their latest option for delivery on or before Christmas Eve. Of course, Amazon Prime members can get standard two-day shipping through December 24, but in many cases the site is offering even faster delivery. And competitors like Walmart and Target are catching up.
Among the potential gifts I could get delivered to my LA-area home by 10 p.m. tonight are an heirloom quality 6-quart dutch oven, noise-cance;ling headphones, and kids dinosaur clogs — oh no, wait, those wouldn’t come until tomorrow. UGH!
“It is very frustrating for customers, I think, when the fast shipping isn’t available because we’ve become used to it,” said Neil Saunders, an analyst at GlobalData Retail.
He says Amazon shortened delivery times in recent years by adding regional and urban fulfillment centers, bringing warehouses closer to customers’ homes. The company says that in the 60 biggest metro areas in the U.S., more than half of Prime orders arrived same day or next day during the first half of this year.
“So that’s the bar that all other retailers are trying to jump or hurdle over,” Saunders said.
Competitors Walmart and Target don’t have as many warehouses but their thousands of stores function like quasi-fulfilment centers, says retail analyst Sucharita Kodali at Forrester.
“Now, it doesn’t always work in reality, because to this day, a lot of retailers don’t always know every single item that is in every store and where it’s located in every store,” she said.
So Walmart is adding package centers in stores to handle next-day delivery orders. And Target is investing $100 million dollars to expand sorting facilities and double the number of deliveries, especially same day ones.
Great for gift buying, not so great for sustainability. All this requires more space, shipping materials and the use of fossil fuels, says Robert Puentes at the Eno Center for Transportation.
“Obviously, the bigger the retailer, the bigger the impact and the more infrastructure intensive it’s going to be,” he said.
And the faster the delivery the less those trips can be optimized. Which is why retailers often promote the fastest option for online orders: picking them up in store.
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