Not your holiday season of years past

Happy Cyber Monday! Traditionally today is the busiest day for online sales but this is not the same holiday season as in years past. Where once people stood in lines on the day after Thanksgiving, known as “Black Friday”, the lines actually appeared longer on Thanksgiving Day itself for stores that bravely opened their doors. In fact according to ShopperTrak, Black Friday shopping at bricks-and-mortar stores in the US was down about 7.0% from a year ago, while on Thanksgiving Day sales were up 24.0%. However, the biggest winner by far was e-retail. A separate survey by IBM showed a 9.5% jump on Black Friday and a 14.3% increase on Thanksgiving Day for online sales over the same period last year.

Are the delivery companies ready for this shift favouring online sales? It’s hard to tell despite all the reassuring each company has done. Investments to infrastructure have been made throughout the year, working with retailers and, for the first time, both UPS and FedEx were open for pickup and delivery on Black Friday.

In another first the USPS has begun delivering seven days a week to major cities and will continue to do so throughout the holiday season. Expanding delivery service beyond its partnership with Amazon for Sunday deliveries, the USPS expects a 12% increase in total packages this season. Last year, the Postal Service attributed a smooth holiday delivery season in part to its seven-day delivery, which allowed it to clear out packages that normally would build up over the weekend.

Last minute deliveries and late cut-off times for guaranteed delivery were prickly thorns for UPS and FedEx in 2013 and in fact both companies have warned retailers they could be charged a premium for unplanned, last minute deliveries. A Kurt Salmon survey noted that retailers may be more mindful of this for this holiday season. The survey showed that 26% of retailers noted their cut-off to guarantee Christmas delivery will be one to three days before Christmas; this is up from 17.0% in 2013. Also, nearly 50.0% of retailers will guarantee delivery by Christmas for orders placed by December 20, compared to 37.0% in 2013.

While FedEx and UPS are positive for a better holiday season, a UPS official noted that the company still has volume limits. “There is only so much capacity in the network.” Moral of this story – Order early to avoid potential delays.