Holiday Shipping Struggles Retailers Will Face

There’s no question that retailers will face shipping challenges during the holiday season. With more consumers shopping online due to the pandemic, shipping carriers will be overwhelmed and deliveries will be delayed. This is a reality shoppers will not be happy with.

To get an idea of how many consumers will be shopping online this holiday season, a Qubit survey found that 35.1 percent of shoppers will shop online more than they did before the pandemic, and 44 percent of respondents plan to shop more online during this year’s Black Friday, Cyber Monday, and Christmas holidays as compared to last year’s holiday season.

Expect a Major Delay in Deliveries

Memphis Commercial Appeal reported that ground shipping services for FedEx and UPS delivered a lower rate of packages on time in May as the two companies handled an unprecedented surge in packages amid the COVID-19 pandemic. Home deliveries have spiked on top of the millions, and transportation companies didn’t have the luxury of preparing for the pandemic like they do for the holiday rush by hiring more employees.

Online shopping sales in April and May were 7 percent higher than what retailers experienced in November and December, according to Adobe Analytics’ Digital Economy Index. May 2020 saw $82.5 billion in online sales, up nearly 78 percent from May 2019, the report said.

A Multi Channel Merchant journalist says that the U.S. Postal Service is also implementing major changes to its delivery operations, effectively eliminating OT for carriers and informing them to leave undelivered items for the next day. This is all part of a cost-saving campaign under new Postmaster General Louis DeJoy, who estimates it will save the cash-strapped agency $200 million per year.

Stay In Touch with Your Distribution Center

Distribution centers accustomed to sending one shipment per order will increasingly be expected to ship items within a single order to multiple addresses. They must also strategize the most efficient way to pick and pack small items at the apex of the holiday season. COVID-driven behaviors require rethinking how to optimize item selection, order sorting, label printing, packing order confirmation forms and boxing — not to mention how to handle gift wrapping services.

“Those who oversee distribution operations are going to have to think differently this year to meet consumer expectations,” said Keith Phillips, President and CEO of Voxware, in a release sent to Independent Retailer. “Automation will be critical and companies that have not taken the initiative to optimize their distribution centers will struggle to deliver a flawless customer experience.”

Shipping Fees Are Going to Increase

Besides delayed delivery times and distribution center problems, major shipping carriers such as FedEx and UPS have started charging retailers higher rates from the surge in ecommerce shopping. According to the Wall Street Journal, UPS is hitting large shippers with price increases in the double-digit percent range in recent weeks and FedEx is following suit. Some of the increases have come mid-contract, while other increases have been made during renewals.

Some major online merchants such as Kohl’s Corp and Bed Bath and Beyond Inc. have already had to contend with limits and fees during COVID-19, and now even more restrictions are being tacked on. Retailers that don’t want to eat the added cost can raise shipping prices, eliminate free shipping or raise prices of goods sold online.

How to Combat Holiday Shipping Struggles

Buy online pick up in store (BOPIS) or curbside pickup could be a game changer for retailers this holiday season. Many consumers are still utilizing this purchasing tactic, even now that brick-and-mortar stores have reopened. Instead of pushing shoppers away with delayed and more expensive shipping, offer them the option to pick up their packages either in-store or through curbside pickup.

Another way of combating holiday shipping struggles is to allow in-store returns of products purchased online. In-store returns are much more convenient than dealing with shipping and handling requirements, and they allow customers to complete the return process immediately. Bringing consumers in store also helps retailers to shift a return into an exchange.