December 18, 2006
Consumers Go Online for Last Minute Gifts
Back in the early days of e-commerce, consumers would order gifts online for Christmas and they would never appear (at least not till after Dec. 25). Today, online merchants have gotten much closer to perfecting the timely delivery of goods prior to Christmas. Many are guaranteeing regular ground delivery with orders placed as late as Dec. 19.
The fact that online stores have gotten pretty good at making Christmas deliveries on orders placed closer to the holiday has not been lost on consumers who have taken the approach, “Why shop today when you can put it off till tomorrow?” That has meant more sales made closer to Christmas for e-tailers.
“There’s no question these sales are going to go right to our bottom line, because we’ve never been able to get the procrastinators,” Shmuel Gniwisch, chief executive of Ice.com told The New York Times. “They always went to the store.”
“Everybody gets better at this the longer you stay in business,” he added. “You work out the kinks.”
John Thomson, a senior vice president at BestBuy.com, saw two primary reasons behind his company’s ability to deliver gifts without rush charges closer to the holiday. The first is BestBuy.com’s ability to process and move goods through its system and the second is better coordination with the United Postal Service (U.P.S.) to get products where they need to go.
“The Friday after Thanksgiving was a huge day for us, and because we share forecast information with U.P.S., we knew we had the right size trucks – and enough of them – outside our facilities,” he said. “That was huge, and it worked as well as we could’ve hoped.”
Norman Black, a U.P.S. spokesman, said, “We’re aggressively trying each year to do more and more for our customers, largely because of e-commerce,” Mr. Black said. “As we do, and as our competitors do, customers start to trust you more and more, and that shows up in something as mundane as the date of the last recommended shopping day.”
Discussion Questions: Is the ability to order later and still receive goods in time for the holiday a major factor in consumers’ decisions to buy online?
How has/will the improvement in making deliveries closer to Christmas affect consumer shopping behavior and the percentage of sales made online and in physical stores?
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On Christmas Day, I just lean out of the window and yell at a street urchin to go fetch that fat goose in the store window. UPS, Urchin Pickup Service.
None of us has yet mentioned the vastly superior selection available via online shopping — especially late in the game — but it belongs in this discussion. What a drag enduring all of the store-shopping hazards and inconveniences described previously, only to discover that the desired size or color is unavailable. Or that Elmo has left the building. While we can legitimately rhapsodize about the excellent delivery services available (I spend $thousands with FedEx each month), online shopping is more about selection than shipping. Hmmmmmmm?
E-Commerce Retailers should hit their knees and thank the US Post Office, UPS, FedEX and especially Amazon for making this business possible. Retailers have never been the primary problem, it’s been the carriers. Due to concentrated economic power in retailers like Amazon, service from carriers has gotten better. Amazon was very demanding of carriers and insisted that they improve their product and service if they were going to do business with Amazon. This quest for excellence by the carriers has made last minute delivery at a reasonable price possible. This has effectively lengthened the selling season for e-commerce providers by 3 to 4 days during the peak selling season of the year.
A topic this juicy and I’m only the fourth comment in. As Stephen Kouzomis would say “Hmmmmm…..”, at least we know who’s working this week!
Er…or perhaps that should be “shopping from work this week”? My wife and I were wrapping gifts last night and determined that we had purchased 95% (by item count) of our gifts online this year. Over 50% of those purchases were catalog inspired, with orders placed online for convenience and — get this — reliability. That’s right, more confident in our chosen retailer’s online order entry systems than in either mail or phone ordering. To today’s discussion, we are also more confident in on time delivery than ever. In my wife’s meticulously managed world, that means time to return the merchandise if it does not meet expectations.
Of course, some shopping habits (i.e. procrastination) never die. So I have a few things to do after I hit “SEND” on this comment. And that means confidence in my chosen retailer’s rush delivery service.
“Mother-in -law research” is always risky, but in this case I don’t think our behavior is atypical.
What really makes this work is not the service on the other end of the high-speed internet connected retailer, but the likes of FedEx, DHL, UPS, etc. These are fabulous business partners that are actually getting better and better at building on the expertise that had already been developed prior to internet shopping becoming mainstream.
Without these third party partners who make it all work, internet shopping wouldn’t be growing at anywhere near the current pace. Keep in mind that you are not only shopping with a retailer, but they are relying on a third party to execute the delivery end of their customer service. What could be a very fragile thing — placing the final connection with your customer into the hands of a third party — has turned out to be incredibly successful…the success of which was in place before the boom began.
Amazingly enough, there’s not even a question when that same third party is carrying both your product and your competitor’s product to the consumer’s door at the same time.
We talk about user interfaces, effective web sites, product description, etc. But I don’t think this factor is brought into consideration at all. It’s considered a “given.” In reality, it’s far from it. The carriers make it all work. Should they falter, who gets the blame? Your favorite internet retailer? (To borrow a closing line) Hmmmmmm?
Reliable, fast shipping options are definitely a key to the growth in online shipping. I think the fact that UPS and FedEx are better at shipping packages than the USPS is also hurting brick and mortar stores.
If you buy something in a store, you need to either stand in line to get it wrapped or take it home and wrap it yourself. Then, you have to get a shipping box followed by a trip to the post office with a significant wait of undetermined length to mail it. On top of that, unless you are willing to pay a large amount extra for Express Mail, you have no idea when the item will actually arrive.
The inconvenience of mailing store-bought items is just one more reason consumers are turning to the Internet.
Being in a NY suburb two weeks before Christmas for the first time in years, I think perception has a great deal to do with it. I have been repeatedly told that malls and stores and their parking lots will be unbearably crowded. I don’t know how true that is because like many, I suspect, I have stayed away. Maybe the stores are actually empty and everyone is shopping online. But as a long term online shopper, I am pleased for those companies managing to get their delivery systems organised for late orders and deliveries. In my case, being able to send gifts to friends and family all over the country at the push of a button has made my life a million times easier. It’s only for things that I need to try on for myself that I have actually ventured into a store.
Reliability and last minute shipping capability are crucial for the end of season shopper. Let’s be honest. The majority of these folks — and some of us qualify — have simply started to run out of time. Their busy lives haven’t left time for shopping, and it’s unlikely they’ll free up the prerequisite day and half over the next week.
Enter online retail. They can shop from work (oh yes they do), pay quickly and safely, and now insure to receive the gift in time for a Christmas Eve wrapping effort.
Online retail is starting to get it very much right. Wide assortments, almost universal in-stock (given that you can shop across a dizzying array of stores for the same item), reliable delivery, easy payment, and good prices.
Count me as a female shopper who did 95% of my shopping online. The items that comprised the remaining 5% may surprise you…gift cards. Many of those trendy teen-friendly retailers like to charge $9 to $15 to ship unwrapped GIFT CARDS directly to recipients! Surely they can do better than that.
As I write this (12:06 December 18th), I am on hold with an online retailer to see if they can “pretty please” deliver the item I want by Saturday 12/23.
Trust and performance have always been the key variables that move people to online shopping more and more. Many many sites now outperform bricks and mortar retail in terms of being able to deliver a variety of products and high-quality service. But in terms of the holidays, shopping a week before Christmas is reasonable. It doesn’t really qualify as extreme procrastination. And yet, it still puts you out of the running at most online retailers. Interestingly, for forgotten items or last-minute stocking stuffers, online seems the perfect place to go. One idea: retailers could queue up a list of items that can be ordered as late as the 22nd or 23rd. You can order late. You just have to order from THIS list.
I’ve been shocked by the # of online retailers able to ship (even standard delivery) just a few days before the holiday. This seems like a new change this year and I think it will reap significant benefits for the online retailer. Everyone has had that moment in a store feeling the panic because the item you want is out of stock and it will take you an hour to go to the competitor 2 miles away. On a personal note online retailers have saved my precious lunch hours during this last week before Christmas. Now let’s just hope everything arrives on time!
As someone who hates mall shopping (parking hassles, the crowds) and always puts off purchases until the 11th hour, being able to buy and get items to friends & family just before Christmas gives me a huge degree in confidence in buying online. And, if specials come up in the waning days of pre-Xmas shopping, all the more reason to procrastinate until the last minute as long as the e-tailer can deliver. Online buying offers a degree of convenience that’s unmatched – 24/7 ability to choose and buy. If retailers are continually fine-tuning the delivery back end, I can’t help but see this as advantage to them.
This makes consumers more confident in using online shopping. Anytime a company can score points with good service, it’s going to be a plus. When you think about it, it’s a lot of work driving over to Wal-Mart, standing on line — good probability they are out-of-stock — then driving someplace else and getting all mad because you had to pay more. Then, going to the post office and standing on line again. No wonder the suicide rate is so high this time a year.
Since shoppers know that prices decline the longer they wait, last-minute purchases are well-rewarded. “Don’t shoot till you see the whites of their eyes” has become “Just wait a few more days and the prices will be even lower.” So retailers who can reliably deliver at the last minute have an edge. But the reliability is essential, since customers and gift recipients whose presents are late get very emotional. Not only do they get upset, they upset the store staff.
Absolutely a plus for online retailers to figure out how to help consumers shop as close to Christmas as possible. All the news stories suggest (as they do every year) that consumers have procrastinated and that the week ahead is “make or break” for most retailers. (The news stories don’t always account for the growing importance of post-Christmas business.) The key competitive disadvantage for online retailers is that they haven’t been able to play into this growing shopping pattern; every day they can catch closer to Dec. 25th will translate into more market share every year.
Doc, as always, is absolutely right. Real success in online retailing is about selection, service and availability. Yet, I still am amazed by this incredible third party partnership. Even more amazing that it’s intertwined between competitors. The ability to deliver, shortening delivery windows into the utmost peak of business is a real example of multiple organizations working together to meet the needs of their customers.
But as pointed out, if you couldn’t get what you wanted in the first place, what difference would it make if it could get there on time? Yet, you still have to have both to make it work.
I’m glad to be always learning and glad that great minds are teaching me.
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On Christmas Day, I just lean out of the window and yell at a street urchin to go fetch that fat goose in the store window. UPS, Urchin Pickup Service.
None of us has yet mentioned the vastly superior selection available via online shopping — especially late in the game — but it belongs in this discussion. What a drag enduring all of the store-shopping hazards and inconveniences described previously, only to discover that the desired size or color is unavailable. Or that Elmo has left the building. While we can legitimately rhapsodize about the excellent delivery services available (I spend $thousands with FedEx each month), online shopping is more about selection than shipping. Hmmmmmmm?
E-Commerce Retailers should hit their knees and thank the US Post Office, UPS, FedEX and especially Amazon for making this business possible. Retailers have never been the primary problem, it’s been the carriers. Due to concentrated economic power in retailers like Amazon, service from carriers has gotten better. Amazon was very demanding of carriers and insisted that they improve their product and service if they were going to do business with Amazon. This quest for excellence by the carriers has made last minute delivery at a reasonable price possible. This has effectively lengthened the selling season for e-commerce providers by 3 to 4 days during the peak selling season of the year.
A topic this juicy and I’m only the fourth comment in. As Stephen Kouzomis would say “Hmmmmm…..”, at least we know who’s working this week!
Er…or perhaps that should be “shopping from work this week”? My wife and I were wrapping gifts last night and determined that we had purchased 95% (by item count) of our gifts online this year. Over 50% of those purchases were catalog inspired, with orders placed online for convenience and — get this — reliability. That’s right, more confident in our chosen retailer’s online order entry systems than in either mail or phone ordering. To today’s discussion, we are also more confident in on time delivery than ever. In my wife’s meticulously managed world, that means time to return the merchandise if it does not meet expectations.
Of course, some shopping habits (i.e. procrastination) never die. So I have a few things to do after I hit “SEND” on this comment. And that means confidence in my chosen retailer’s rush delivery service.
“Mother-in -law research” is always risky, but in this case I don’t think our behavior is atypical.
What really makes this work is not the service on the other end of the high-speed internet connected retailer, but the likes of FedEx, DHL, UPS, etc. These are fabulous business partners that are actually getting better and better at building on the expertise that had already been developed prior to internet shopping becoming mainstream.
Without these third party partners who make it all work, internet shopping wouldn’t be growing at anywhere near the current pace. Keep in mind that you are not only shopping with a retailer, but they are relying on a third party to execute the delivery end of their customer service. What could be a very fragile thing — placing the final connection with your customer into the hands of a third party — has turned out to be incredibly successful…the success of which was in place before the boom began.
Amazingly enough, there’s not even a question when that same third party is carrying both your product and your competitor’s product to the consumer’s door at the same time.
We talk about user interfaces, effective web sites, product description, etc. But I don’t think this factor is brought into consideration at all. It’s considered a “given.” In reality, it’s far from it. The carriers make it all work. Should they falter, who gets the blame? Your favorite internet retailer? (To borrow a closing line) Hmmmmmm?
Reliable, fast shipping options are definitely a key to the growth in online shipping. I think the fact that UPS and FedEx are better at shipping packages than the USPS is also hurting brick and mortar stores.
If you buy something in a store, you need to either stand in line to get it wrapped or take it home and wrap it yourself. Then, you have to get a shipping box followed by a trip to the post office with a significant wait of undetermined length to mail it. On top of that, unless you are willing to pay a large amount extra for Express Mail, you have no idea when the item will actually arrive.
The inconvenience of mailing store-bought items is just one more reason consumers are turning to the Internet.
Being in a NY suburb two weeks before Christmas for the first time in years, I think perception has a great deal to do with it. I have been repeatedly told that malls and stores and their parking lots will be unbearably crowded. I don’t know how true that is because like many, I suspect, I have stayed away. Maybe the stores are actually empty and everyone is shopping online. But as a long term online shopper, I am pleased for those companies managing to get their delivery systems organised for late orders and deliveries. In my case, being able to send gifts to friends and family all over the country at the push of a button has made my life a million times easier. It’s only for things that I need to try on for myself that I have actually ventured into a store.
Reliability and last minute shipping capability are crucial for the end of season shopper. Let’s be honest. The majority of these folks — and some of us qualify — have simply started to run out of time. Their busy lives haven’t left time for shopping, and it’s unlikely they’ll free up the prerequisite day and half over the next week.
Enter online retail. They can shop from work (oh yes they do), pay quickly and safely, and now insure to receive the gift in time for a Christmas Eve wrapping effort.
Online retail is starting to get it very much right. Wide assortments, almost universal in-stock (given that you can shop across a dizzying array of stores for the same item), reliable delivery, easy payment, and good prices.
Count me as a female shopper who did 95% of my shopping online. The items that comprised the remaining 5% may surprise you…gift cards. Many of those trendy teen-friendly retailers like to charge $9 to $15 to ship unwrapped GIFT CARDS directly to recipients! Surely they can do better than that.
As I write this (12:06 December 18th), I am on hold with an online retailer to see if they can “pretty please” deliver the item I want by Saturday 12/23.
Trust and performance have always been the key variables that move people to online shopping more and more. Many many sites now outperform bricks and mortar retail in terms of being able to deliver a variety of products and high-quality service. But in terms of the holidays, shopping a week before Christmas is reasonable. It doesn’t really qualify as extreme procrastination. And yet, it still puts you out of the running at most online retailers. Interestingly, for forgotten items or last-minute stocking stuffers, online seems the perfect place to go. One idea: retailers could queue up a list of items that can be ordered as late as the 22nd or 23rd. You can order late. You just have to order from THIS list.
I’ve been shocked by the # of online retailers able to ship (even standard delivery) just a few days before the holiday. This seems like a new change this year and I think it will reap significant benefits for the online retailer. Everyone has had that moment in a store feeling the panic because the item you want is out of stock and it will take you an hour to go to the competitor 2 miles away. On a personal note online retailers have saved my precious lunch hours during this last week before Christmas. Now let’s just hope everything arrives on time!
As someone who hates mall shopping (parking hassles, the crowds) and always puts off purchases until the 11th hour, being able to buy and get items to friends & family just before Christmas gives me a huge degree in confidence in buying online. And, if specials come up in the waning days of pre-Xmas shopping, all the more reason to procrastinate until the last minute as long as the e-tailer can deliver. Online buying offers a degree of convenience that’s unmatched – 24/7 ability to choose and buy. If retailers are continually fine-tuning the delivery back end, I can’t help but see this as advantage to them.
This makes consumers more confident in using online shopping. Anytime a company can score points with good service, it’s going to be a plus. When you think about it, it’s a lot of work driving over to Wal-Mart, standing on line — good probability they are out-of-stock — then driving someplace else and getting all mad because you had to pay more. Then, going to the post office and standing on line again. No wonder the suicide rate is so high this time a year.
Since shoppers know that prices decline the longer they wait, last-minute purchases are well-rewarded. “Don’t shoot till you see the whites of their eyes” has become “Just wait a few more days and the prices will be even lower.” So retailers who can reliably deliver at the last minute have an edge. But the reliability is essential, since customers and gift recipients whose presents are late get very emotional. Not only do they get upset, they upset the store staff.
Absolutely a plus for online retailers to figure out how to help consumers shop as close to Christmas as possible. All the news stories suggest (as they do every year) that consumers have procrastinated and that the week ahead is “make or break” for most retailers. (The news stories don’t always account for the growing importance of post-Christmas business.) The key competitive disadvantage for online retailers is that they haven’t been able to play into this growing shopping pattern; every day they can catch closer to Dec. 25th will translate into more market share every year.
Doc, as always, is absolutely right. Real success in online retailing is about selection, service and availability. Yet, I still am amazed by this incredible third party partnership. Even more amazing that it’s intertwined between competitors. The ability to deliver, shortening delivery windows into the utmost peak of business is a real example of multiple organizations working together to meet the needs of their customers.
But as pointed out, if you couldn’t get what you wanted in the first place, what difference would it make if it could get there on time? Yet, you still have to have both to make it work.
I’m glad to be always learning and glad that great minds are teaching me.