Business

Retailers reel in delivery deadlines to get Christmas gifts to shoppers on time

Shoppers hoping to nab holiday gifts online this year may need to prepare well in advance for their purchases. Numerous retailers are setting earlier deadlines for merchandise ordered online to reach customers’ homes before Christmas.

Frères Branchiaux Candle Co co-founder Celena Gill designated Nov. 30 as the last day for customers to place their orders if they want scented soy candles to arrive before Christmas. “We have already seen a delay in shipping this month and we anticipate that it will be worse as we near Christmas day,” Gill said. She declined to comment on last year’s deadline.

State Bags, a New York-based luggage company, is cutting off Christmas shipping three days earlier than last year’s deadline of Dec. 18. It will not offer its annual two-day holiday shipping promotion this year due to supply chain issues, co-founder Jacqueline Tatelman said.

FedEx (FDX.N) and United States Postal Service set ground shipping deadlines for Dec. 15, identical with last year’s delivery cutoffs – even though there is one day more between Thanksgiving and Christmas this year. UPS (UPS.N) is providing delivery deadline estimates on its website based on timing, location and shipping services.

By some estimates, there may be nearly 5 million more packages per day than delivery drivers can handle during the peak season when unit volumes can double. And, FedEx has already signaled trouble for its ground unit, which handled more than 9.3 million packages a day for customers including Walmart (WMT.N) last quarter. In September, the Memphis-based company warned that employee hiring and retention problems were slowing deliveries.

UPS, the world’s biggest parcel delivery firm, is dropping low-profit customers – a move that could hit vulnerable retailers. On the other hand, UPS will make nationwide deliveries on Saturdays this year and is taking several other steps to minimize “chaos costs” and improve on-time service, UPS Chief Executive Carol Tome said.

Retailers typically use delivery cutoff dates as a competitive differentiator, and during normal times, they push them out as far as possible to appeal to last-minute shoppers. But that strategy comes with extra risk this year, particularly for small shops vulnerable to bad customer reviews. And, in a year marked by hurricanes and other severe storms, there’s little wiggle room for other unforeseen disruptions due to factors such as wicked winter weather.

But this year, retailers large and small are encouraging customers to shop early to shift demand and ease supply chain backups. Some U.S. shoppers are panicked that supply chain snarls will spread to home delivery of Christmas gifts, Tome said on a conference call with analysts on Tuesday.

“In fact, some think that 50% of holiday shopping will be completed by Cyber Monday,” said Tome. “Some of our customers are actually pulling forward promotions,” she said, referring to retailers’ earlier Christmas marketing messages that translated into a bump in demand.

For example, UPS began working with Amazon.com (AMZN.O), its biggest customer, several months ago. Still, it will again enforce volume limits and not pick up all requested packages if unexpected volume threatens to swamp its system – a move that hit retailers like Gap (GPS.N), Macy’s (M.N) and Nike (NKE.N) last year.

Shopify (SHOP.TO) is encouraging its merchants to update their shipping policy pages to highlight delays and lower expectations. The company is also suggesting that merchants offer earlier Black Friday-Cyber Monday sales and integrate local delivery options and curbside pickup for brick-and-mortar merchants.

Meanwhile, Etsy (ETSY.O) has improved its estimations of delivery dates to promote sales and reduce uncertainty for its community of homemade or vintage goods sellers. “Nearly every item from a U.S. seller will include an estimated delivery date this holiday season,” Etsy CEO Josh Silverman said in a blog post.

Larger retailers including Walmart, Target (TGT.N), Amazon, Macy’s and Best Buy (BBY.N) have not announced their final delivery cutoff dates, but they are promoting options to reduce stress on the system. They’re offering early and extended Black Friday deals and enticing customers to use gig delivery services like DoorDash and Shipt or “buy online, pick up store” options.

Last year, Walmart announced its delivery deadlines in mid-December, while Amazon notified customers at the end of November that eligible products were available for two-day and one-day shipping on Dec. 23 and Christmas Eve.