This year, Santa’s reindeer will be huffing and puffing their way from the North Pole, carrying more than they usually do.þþAmericans are expected to buy a record $89 billion worth of gifts online this holiday season, according to a new report from Forrester Research.þþThat’s a 13 percent jump over last year, when hundreds of millions of gifts and bad weather overtaxed United Parcel Service and FedEx, leading to shipping delays and empty space under the tree.þþGiven the expected spike in online sales, the big question will be whether retailers and carriers can plan well enough to avoid the same problems.þþ“Is it a redux of last year, or did we learn any lessons to fix the problem?” said Sucharita Mulpuru, an analyst with Forrester, who wrote the report predicting this year’s holiday sales.þþBig Lots is increasing its social media presence with #Nailingthis during the holiday season. Advertising: Retailers Like Lowe’s Are Getting a Jump on the HolidaysOCT. 29, 2014þBetabrand is spoofing seasonal ads.Advertising: Autumn Is in the Air, but for Marketers, Christmas Has Already Begun OCT. 15, 2014þKmart began its seasonal advertising with a “not-a-Christmas commercial.”Household Finances May Curb Holiday SpendingOCT. 13, 2014þU.P.S. expects to ship 585 million packages in December, 11 percent more than last year, when it shipped 31 million parcels on Dec. 23. This year, the carrier, which ships an average of 17 million packages a day, is preparing to send 34 million pieces of mail on Dec. 22, according to a spokeswoman, Susan Rosenberg.þþ“We started talking to our customers much earlier this year, and we were planning together with them for their volume forecasting,” she said.þþU.P.S. and FedEx, which typically hire tens of thousands of extra workers around the holiday season, plan to hire even more this year, both companies said. And they are taking other steps, like adding more sorting facilities and technology to help track packages.þþAt the same time, they will also be crossing their fingers to avoid the abysmal weather that delayed shipments last year (FedEx even has 15 full-time meteorologists on staff).þþBut the onus is not just on the carriers. Major retailers like Walmart and Target are also taking steps to make sure that customers get their gifts on time.þþTarget is planning an even bigger marketing push to get customers who order online to pick up their gifts in the store, a feature the company introduced last year, a Target spokesman, Eddie Baeb, said. In-store pickup now accounts for about 15 percent of all online Target orders, he said.þþWalmart, with its major rural footprint, has offered in-store pickup since 2007. The service could appeal to customers who live in remote areas where home delivery is more difficult.þþ“I don’t know what the attractiveness of free pickup is except that not everybody lives in an apartment with a doorman and a lot of people live out somewhere where dropping off at a house is not so trustworthy,” said Bernard Sosnick, an analyst with Gilford Securities. “For families where the breadwinners are at work, who’s there to receive home orders?”þþIn-store pickup has the added benefit of drawing in foot traffic, something brick-and-mortar stores have struggled with as the popularity of online shopping has risen.þþ“If they’re any good,” said Richard Jaffe, an analyst with Stifel Nicolaus, “once you’re in the store they’re going to tempt you with a lot of other stuff.”þþIn-store pickup also allows stores to avoid the cost of shipping — and perhaps most important, free shipping, which retailers have increasingly offered to stay competitive.þþ“In the world of ubiquitous free shipping, one could make the argument that in-store pickup is directly accretive to the bottom line, because you don’t have to eat the cost of shipping and distribution,” said Stephen Beck, founder of cg42, a management consultancy firm.þþFor customers who prefer to have gifts shipped to their home this holiday season, major retailers and carriers have already begun working together to predict mail volumes and shipping routes.þþTo help avoid delays, Walmart, for example, began feeding information to its carriers three weeks earlier than normal, starting in mid-August, according to a spokeswoman, Jaeme Laczkowski.þþRetailers will have to commit to specific shipment volumes, and carriers may charge extra fees, or reject shipments outright, if they exceed those amounts.þþ“We’re not going to jeopardize the efficient operations of the network,” said Ms. Rosenberg, the U.P.S. spokeswoman.þþCarriers are also relying on retailers to ship more packages from stores themselves, instead of from distribution centers.þþThat way, shipments are “not all clustered in a few areas,” Ms. Rosenberg said. “It also puts the deliveries closer to the end customers.”þþPerhaps most significant, however, is what this year’s online shopping trends represent for physical retailers. While more consumers may be shopping online, the pace of that growth has slowed. There is one simple reason: Fewer people are new to the web.þþ“There’s still a real reason for being for bricks-and-mortar retail,” said Mr. Jaffe, of Stifel Nicolaus. “I think we’re seeing the beginning of an equilibrium between bricks and mortar and electronic or e-commerce.”þþTraditionally, the holiday season has been when consumers have been most willing to try online shopping for the first time, said Ms. Mulpuru, the Forrester analyst. While more people shop for gifts on mobile phones, she expects about three million people to try e-commerce this year, a smaller number than in years past.þþ“There’s not room for a lot of growth,” she said. “I would argue that it should grow faster because this is a time for customer acquisition. But I think we’re limited by some of these carrier issues.”þþOne way to ease the carrier issue is to start making customers pay for shipping, Ms. Mulpuru said, a move many retailers may be hesitant to do.þþCustomers may also choose to begin ordering gifts earlier, especially given that holiday sales continue to creep in earlier and earlier.þþ“If you’re worried about delivery by Christmas, guess what? What do you do? Order earlier,” said Mr. Sosnick, of Gilford Securities.þþHe added: “It’s just the last-minute shoppers that get hung up.”
Source: NY Times
