Last-minute deliveries: What’s new for holiday 2016?
December 16, 2016 11:47 AM
It’s that time of year when all of retail prepares to whip into a frenzy, and shipping and logistics companies hire and train personnel like mad. That final push on which a year’s worth of success and failure are ultimately judged. The holidays are coming!
To get in the spirit, I’d like to share my top predictions for the 2016 holiday season as we adjust to a new normal—from what constitutes the holiday sales cycle to how retailers ship and consumers receive gifts.
1. Procrastinators Rejoice
Consumers feel no need to rush. We’ve moved into an era where we are comfortable with and expect shortened timeframes for shipping and delivery, thanks to the rise of 2-day, next-day, and same-day service options. This ultimate in convenience shopping enables shoppers to rest on their laurels a bit, still purchase the perfect gift, and get it there on time. A mini holiday miracle.
In 2015, Procrastinators became the fastest growing segment of consumer shoppers according to Cardlytics. Their growth easily surpassed the rate for Black Friday Deal Hunters and Slow and Steady Shoppers. Amazingly, last year on Dec. 21st, approximately 60% of people still had gifts to purchase. I expect to see even sharper increases in procrastinators this year, with other categories experiencing only modest gains. And, with 25% of consumers willing to pay a premium for same-day services (up from 14% two years ago), we’re looking at a whole new holiday timeline-- one that is not likely to reverse in the coming years.
2. The Five Days of Christmas
This year, Black Friday will no longer be the biggest in-store sales day of the year, according to RetailNext. Friday, Dec. 23, and Super Saturday, Dec. 17, are both projected to beat Black Friday for overall sales, with December 21st and 22nd predicted to take spots #4 and #5. Four of the five largest in-store holiday sales days occur closer to Christmas than ever before.
Change is brewing on the e-commerce side too. Last year, Thanksgiving through Cyber Monday weekend sales grew 10% year-over-year. But moving closer to Christmas, December 22nd and 23rd 2015 saw e-commerce sales jump 22% and 32% respectively. That’s quite a jump! I believe there will be an even bigger spike this year as companies give Santa’s reindeer a run for their money with last-minute deliveries. On top of that, the beginning of Hanukkah coincides with Christmas Eve, adding even more demand for deliveries make it to shoppers’ homes on-time.
3. Shipping and Delivery Companies become Pressure Players
In 2013, deliveries spiked on December 17th as shoppers rushed to make retailer cutoff dates for package shipments. UPS alone delivered more than 29 million packages that day. Then last year, with retailers’ advancement in fulfillment capabilities, the peak shipping day shifted to December 22nd—almost a week later. It’s an incredible shift when you consider that the core shopping season is only five weeks long.
Traditional carriers try to smooth demand during the holiday season to ensure timely delivery. This year UPS is scheduling Dec. 19 to be their peak day but we anticipate Dec. 22 is the date to watch across the board.
It is also worth paying attention to numbers on Dec. 24. With Amazon and several same-day delivery services primed to deliver up to the last minute, expect a significant year-over-year surge in Christmas Eve sales and deliveries, perhaps the biggest we’ve seen so far.
4. Local Delivery Becomes a Release Valve
Historically, retailers’ ability to fulfill last-minute orders has been constrained by two factors: pre-negotiated shipping caps and weather incidences. Shippers are hiring personnel, doing anything possible to make sure consumers’ purchases make it to their destinations on time and in good condition. But despite these great efforts, inevitably every year we hear about shipping fails, whether it’s an unexpected demand surge or a catastrophe of Mother Nature’s making (anyone have recollections of FedEx delivering on Christmas Day last year due to a storm in Tennessee?).
This year we will see a large increase in retailers big and small partnering with last-mile delivery companies as a release valve for holiday fulfillment pressures. Aside from giving retailers the option to easily and affordably offer same-day service, retailers can leverage their existing inventory from brick-and-mortar stores. Who needs a nearby warehouse facility when you can grab items off the rack at your local shops and send it to your customers same-day? This option will also give retailers a fighting chance against the very well-positioned Amazon in the fight for consumer dollars.
5. Consumers Opt for Certainty
At a time when so much of life seems beyond one’s control, people want certainty wherever they can get it. Re/coderecently reported that 56% of millennials expect same-day delivery to be an option.
Approaching Christmas, people will increasingly select rapid fulfillment methods to guarantee on-time delivery—something that becomes riskier with traditional shippers the closer we get to the holidays. While traditional carriers see around a 2x delivery spike in the days before Christmas, my company saw a 6x delivery spike during the same period last year. This year, expectations are even higher as millions more people have been introduced to the convenience and reliability of same-day service.
So that’s my view of this year’s holiday season. Last-minute sales will be up, there are new dates to watch on the calendar, and while Amazon will continue to lead holiday sales and shipping efforts, retailers will begin to leverage new options in fulfilment that will serve them well now and in the future. It will be a Christmas to remember! When and how will you do your shopping?
Deliv provides retailers with a same-day delivery service for online orders.