Be Careful What You Wish For, You Might Just Get It

A wise boss, Karyn, once told me this. It stayed with me, and it is certainly true today. Look at the shipping debacle UPS and Fed Ex are navigating through this week. All those packages not delivered on time for Christmas, and their need to decide to offer refunds and apologies, or not to.

Blame is being placed everywhere by everyone. Carriers are blaming the weather, and now the consumers for waiting too long to order their gifts. Retailers are blaming the shippers and the consumers. Consumers are blaming the shippers and the retailers. It reads more like a Dr. Seuss story. So who really is to blame? It is more simple than anyone is giving thought to.

All are to blame.

Retailers wished for a merry Christmas with more sales and greater online emphasis this holiday season. Special sales, special hours, and special shipping discounts (including free shipping offers as late as two days before Christmas this year) – all lures to drive sales online. And they worked, retailers got what they asked for. Shippers, like UPS and Fed Ex, got their wish with more shipments from online orders, and more express deliveries with two day and next day service offerings. Consumers got their wish with more deals, online discounts, and free shipping offers (shipping costs are the number three reason why consumers don’t purchase online*). With 36 percent of holiday shopping left to complete 9 days before Christmas, and 14 percent left with just two days to go** (larger than usual for holiday), extended shipping discounts by retailers enabled shopping delays. The unexpected amount of last minute shoppers, combined with the increase in online sales, tested the package processing capacity of shippers.

Now in defense of each, they had no real reason to be overly cautious. Retailers wanted to maintain or grow their online presence. Consumers waited to find the best prices, using the convenience of online having little concern from past experiences that they would miss the deadline. Shippers planned to ship what they always ship around the holidays. And, while bad weather challenges didn’t help either, there is always bad weather somewhere this time of year, so throw that one out.

But… Yes – that’s right, there is a but. The real issue here is everyone failed to recognize the new traditions of the holiday season. Planning holiday business or gifting solely around the past no longer works. The pulse of this year’s holiday was different from past years. The hours, the days stores opened, the amount of marketing to drive sales, and the push towards online selling all indicated a shift. The 25 percent of holiday purchases made online last year leaping to what was expected to be 35 percent this year* ended up being even higher. As the holiday progressed it became clear it was not business as usual, as in Christmas’s past. This was the year we witnessed Christmas future. Reading the pulse of holiday during the holiday is the new norm. Retailers do it by looking at sales and adjusting discounts. Consumers do it by looking for the right gifts and reacting to price adjustments. Shippers should do it based on trends as well, but they didn’t read the pulse at all. The signs were there that there would be a late holiday surge and they failed to adjust.

Hopefully retailers, shippers and consumers have learned a valuable lesson from holiday 2013. When they (shippers) say to ship ten business days ahead of Christmas for guaranteed delivery, do it. When they (NPD analysts) say adjust your holiday marketing this year, do it. When the consumer is slow to complete shopping** for holiday, warn them. But most of all, be careful what you wish for…you might just get it.

* Source: The NPD Group, Inc. / 2013 Holiday Spending Survey
** Source: The NPD Group, Inc. / Holiday Shop-o-Meter, powered by CivicScience

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