The tug of war between cost, speed, and customer experience (CX) in the retail world reaches its peak during the holidays every year. With a surge in demand around delivery before the holidays, customers want peace of mind that their online orders will arrive on time.
In order to win the holidays this year, retailers should focus on seamless delivery experiences and getting those long-awaited Black Friday purchases and Cyber Monday orders delivered well before holiday cutoffs. According to Adobe Analytics, consumers have already spent $73B during the 2019 holiday, and sales are projected to double before the season is over, reaching a record-shattering $143.8B. According to eMarketer’s forecast, this will be the first-ever trillion-dollar holiday shopping season. Total US retail sales are projected to climb 3.8% to $1.008 trillion, while US retail eCommerce spending is estimated at a 13.2% increase to $135.35 billion.
Key Takeaways of the 2018 Holiday Retail Season
In 2018, retail spending surged to an all-time high, with shoppers spending a record-breaking $853 billion. According to Google, eCommerce sales saw the most significant growth in more than a decade with an increase of 18% year-over-year.
Even though sales fluctuate throughout the year, the holiday season can impact the overall success of a company, as holiday sales represent about 20% of annual retail sales annually. Last year, more than 89 million people shopped over Thanksgiving weekend (both online and in-store), which was a 40% increase from 2017.
Cyber Monday was the top spending day of the holiday season with $7.87 billion in sales, followed by Black Friday with $6.22 billion, and Thanksgiving with $3.68 billion. According to our data, there was a 4X rise in two-day shipping in 2018, and customer engagement with tracking pages increased 38% during the week of Thanksgiving (and 48% the week after) as customers closely monitored delivery progress for an increasing number of shipments. [Read our full recap here.]
Unwrapping Customer Expectations for This Holiday Season
This year, retailers are under even more pressure to maintain profitability during one of the busiest shipping seasons in history. In addition to the high volume of sales, and even higher volume of orders, there are six fewer calendar days between Thanksgiving and Christmas than last year, so retailers have a shorter time window to get presents under the tree.
The Importance of Last Mile Delivery During the Holidays
In today’s hyper-competitive environment, where shoppers are lured by online convenience and quick fulfillment options, retailers have to provide consistent, amazing experiences across the customer journey — and that experience doesn’t stop after shoppers hit the “buy” button. Consumers rarely forget bad experiences, especially if the most wonderful time of the year is ruined by a delayed shipment. 83% of customers will not return if they experience only one poor delivery experience.
Retailers who want to remain competitive have to adapt. According to our shopper survey, 1 out of 4 shoppers planned to do exclusively do their online shopping on Amazon. In response, 96% of retailers report they plan to change their shipping tactics to compete with larger retailers like Amazon and Target this holiday season.
Customers are looking for convenience, fast delivery, precise order tracking, and reassurance that the retailer will stick to the delivery promise date. However, faced with the pressure during the holiday season, retailers often fall short and end up with inefficient processes and increased costs.
What impact will the short holiday shopping season have on consumers?
Both retailers and consumers are making adjustments to accommodate the shorter season. Retailers, worried about meeting fulfillment promises, have pushed promotions back a week to spread out their order volume.
PSA from your friendly neighborhood #supplychain reporter. Retailers are not looking to screw you out of the best #BlackFriday deals by offering you lesser deals now. They are trying to spread out their order volume to keep up with speedy fulfillment promises.
— emma cosgrove (@emmacos) November 22, 2019
Consumers are also shopping for presents earlier. 34% of consumers have said they will begin searching for deals earlier, 28% will make their holiday purchase sooner, and 16% will shop more often with retailers who offer expedited shipping. This will also ease one of consumers’ top concerns for the holiday season — not getting presents in time to put them under the tree. Four in 10 shoppers (38.6%) say that their biggest concern this year is that their package will be late.
Your Last Mile Delivery Checklist for Black Friday, Cyber Monday, And Beyond
As shoppers start ordering items and peak volume rises, here are some best practices to remember as you get through the season:
- Deliver On Promises You Can Keep
Promises around estimated delivery dates (EDDs) should not be empty words — they should be a commitment. Make sure to set realistic expectations and be transparent with your customers. Today, in the Amazon era, the promise date can determine your customer lifetime value (LTV)—98% of shoppers will stake their brand loyalty on their delivery experience.
Our survey showed that “reliability” was one of the most important aspects of the delivery experience. Consumers want to understand how and when their deliveries will arrive, and retailers can set those expectations as early as the product page.According to our survey, setting this expectation increases customer conversion. 29% of consumers are more likely to buy if the delivery date is within one week, 27% of consumers are more likely to buy if they see the delivery date regardless of the date, and 20% are more likely to buy if they can pick out the delivery day.
- Communication Is Key
During the holiday season, consistent communication with your customers is crucial. The first step is to set up a holiday email strategy to keep customers up to date on major sales and key shipping cut-offs. Big retail players take this very seriously, and they even dedicate a central position on their website to inform customers about shipping dates and slower processing dates during the holiday season.
- Prepare For The Unexpected
It’s almost inevitable that delivery exceptions will happen, especially during the busiest time of the year. When this happens, it’s crucial to not leave customers in the dark. When shipping goes wrong, 98.8% shoppers want to be notified about the issue at hand, and this expectation is only rising year-over-year. According to our research, email is the most preferred channel of communication for 56% of the customers, followed by SMS (33%) and through the tracking page (10%).
In addition to sending alerts to customers, brands like Bonobos will host their annual Ninja Palooza — an ask for every employee to help the customer service team man the phones after Cyber Monday, making sure that customer queues stay low. Other brands, like UncommonGoods do this by canceling orders that have the potential to be damaged or delayed and re-shipping the item. That way, they are guaranteed to hit their promise dates every time.
- Optimize The Customer Journey
Tracking pages and alerts can help to reduce WISMO calls and customer complaints, but they do nothing to satisfy customers whose deliveries are going off the rails. Brands who utilize visibility to their advantage can also use the data to detect and resolve issues before they impact the customer, minimizing negative impact — stopping WISMO in its tracks. Make sure to monitor issues such as stalled shipments or long dwell times that may cause delivery delays, and listen to customer feedback and make improvements along the way.
Empower Your Team To Keep Delivery Promises
While delivery exceptions happen, it’s essential to remember that WISMO calls are typically a symptom of a larger problem afoot. Prepare your customer service team ahead of holiday rushes so they are aware of any promotions or major issues and can respond appropriately when an issue occurs.
If you want to learn about shopper wants, needs, and expectations during the holidays and throughout the year, as well as how to make supply chain trade-offs that enable your team to win customers, make sure to read our third annual consumer study: Last Mile Delivery Wars: How To Keep Your Promises and Win With Reliability.