This is great for online sellers and good, but not spectacular for physical stores. While brick and mortar stores are on track for a smaller boost bringing the total volume of holiday sales up 4.8 percent over last year.
The trick is in the delivery
This year’s sales figures are likely to stretch the resources of delivery systems beyond what they’ve experienced before with shoppers taking advantage of bargains and expecting fast and accurate delivery of their online purchases. For its part, Amazon is trying to get ahead of the game by offering free shipping for the rest of the year to every customer. That means buyers that don’t spend the usual $25 minimum or are members of Amazon Prime will get the same 2 day delivery promised to Amazon’s Prime members. But my guess is that most customers will still spend more than the $25 minimum even if it comes in smaller individual purchases, making up somewhat for the discrepency.
But more and smaller purchases means more deliveries of less expensive items. And the bottleneck is likely to get tough to manage in the last days of the buying season. As a hedge against this Amazon is enlisting local entrepreneurs to help fulfill their last mile gaps. The company’s ‘Amazon Delivery Service Partners’ may make a difference as local drivers who invest as little as $10,000 scramble around their neighborhoods dropping packages at doorsteps.
Odds of success
There’s no doubt that delivery of online orders is a challenge. Every online seller needs some kind of delivery service and most turn to common carriers and the USPS, or even a combination of services. The question is whether they are able to scale on demand to meet the needs of seasonal volumes. For its part, the USPS has a good history of delivering the vast majority of its volume on time and to the right destination over its long history. UPS, FedEx and their competitors adjust by bringing on their own batteries of seasonal help to cope with the loads. New entrants in the last mile delivery fray like Amazon face challenges in recruiting seasonal workforces that are likely to become even more difficult as unemployment rates continue to hit historical lows.
The best bet for sellers looking to fulfill their customers’ holiday shopping lust is to get them to buy early. The delivery promise needs to stay as stated and that means getting orders into the delivery chain while there is still room for your packages. At some point the capacity of the existing last mile delivery services will become choked with smaller orders each of which are just as important as are their more valuable counterparts. How you manage your orders will determine how successfully you are able to manage your deliveries.