The Delivery Dilemma

With Christmas just days away, a number of e-commerce sites are now displaying disclaimers stating that they cannot guarantee deliveries before the holiday, further fueling debate over whether e-commerce is ultimately capable of giving brick-and-mortar retailing a legitimate long-term challenge.

For its part, UPS has set today as the last day it will accept packages for Next Day Air, and will not deliver on Christmas Day, a pre-set holiday for all employees. Approximately 4.3 million packages are expected to move through the company today, which doubles its average volume of business.

Ultimately, this limitation on e-commerce seems to lock out the last-minute shopper and raises the question of whether holiday season frustrations will drive shoppers back into the arms of traditional retailers.

Web Sites Set Firm Order Dates

Even the most powerful Web merchants knew their limitations this year, setting firm deadline for holiday orders. Amazon.com stopped taking Christmas delivery orders yesterday, as did Lands’ End. Additionally, in order to guarantee these late-in-the-season deliveries, many shoppers are being forced to pay a hefty price. In fact, in some cases, the cost of shipping a book or CD from Amazon.com may be as high as the item itself.

As far back as December 15th, major sites such as Macys.com and Buy.com informed customers that they would have to pay for second day express shipping if they wanted guaranteed delivery before Christmas.

In a report from FleetBoston, it was noted that average shipping charges online have increased from $7.44 to $10.91 (US$), largely due to the use of priority mailing services. Forrester Research projects that online orders from consumers and businesses will soar past the two billion per year mark by 2003, putting the greatest pressures on order fulfillment and systems and delivery companies.

Delivery As Perk

In some instances, selected e-tailers have decided to use delivery as an incentive. Houston, Texas-based Ashford.com, an online luxury goods retailer, announced earlier this month that it would offer free delivery until the end of the year, and accept orders for Christmas delivery until today.

Ashford.com turned to free delivery when it realized that it was unable to compete in the area of discounted merchandise. Manufacturers of some luxury goods discourage discounting, which caused Ashford executives to get creative in their approach to luring new customers to their site.

Communication is Key

In a report issued earlier this year, Forrester Research suggested that e-tailers need to keep their customers informed about deliveries or delays in fulfillment. At the same time, Forrester noted, manufacturers need to reposition themselves to be able to deliver packages to individual customers rather than focus all of their efforts on shipping in bulk to stores.

Meanwhile, a number of studies indicate that customer expectations are rising as they become more accustomed to shopping online, and that many buyers are becoming more savvy about timely fulfillment.